A £14bn defence training academy in south Wales has been scrapped as part of the Coalition Government's cuts programme.
The Metrix team, which includes Laing O'Rourke and FM outfit Sodexo, was preferred bidder for the Vale of Glamorgan scheme.
The decision to scrap the St Athan project was part of the strategic defence and security review announced yesterday, which saw cuts of up to 8% in the defence budget.
However, Prime Minister David Cameron left the door open for academy to go ahead at some point: "This is not the end of the road for training at St Athan."
He said the PFI project was not affordable but that discussions would take place to look at alternative options.
The proposed Defence Technical College would have offered specialist engineering, communications and information systems training to all the UK's armed forces.
The Metrix consortium was appointed as preferred bidder in January 2007, subject to it developing an affordable and value-for-money contract proposal.
Defence Secretary Liam Fox said: "Given the significance of this project and the opportunity to provide a world-class training facility, the Ministry of Defence has worked tirelessly to deliver this project.
"However, it is now clear that Metrix cannot deliver an affordable, commercially robust proposal within the prescribed period and it has therefore been necessary to terminate the DTR [defence training rationalisation project] procurement and Metrix's appointment as preferred bidder.
"We will however now carry out some work before finalising the best way ahead; including to confirm both our training and estates requirement, and the best way to structure the solution that will meet them.
"To ensure momentum is not lost, work on the alternative options will begin as soon as possible and we hope to be able to announce our future plans in the spring."
Metrix chairman Charles Barrington said: "Metrix, its partners and the MoD have all worked extremely hard and in close partnership to deliver a solution which offers value for money combined with the very best technical approach to training and a rationalised estate.
"Despite the best efforts of all concerned, the combined effect of an extremely tough economic environment and numerous commercial and technical challenges meant that the project could not be delivered within the framework and timescale originally intended."
The £14bn cost covers the operation of the academy's 30-year life.
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