EU funding for a cross-border bridge joining counties Down and Louth has been withdrawn.
Estimates for the building of the 195-metre bridge have soared since approval was given and both the Irish Government and Stormont committed the required funding.
Intense efforts to meet the shortfall, estimated at well over €10 million, and the Special EU Programmes Body (SEUPB) announced today that funds it had earmarked for the project would now be reallocated.
SDLP and Sinn Fein representatives expressed their disappointment at the decision, with some insisting that the project could yet be revived.
The widely anticipated announced was confirmed by the EU programmes body.
"The SEUPB is now exploring options for the reallocation of this funding to eligible projects capable of being delivered by December 2015 to ensure that the drawdown of funds from the European Commission is maximised and that no money is lost to the Northern Ireland or Ireland economies," it said.
A statement by the Department of Transport in Dublin said: "The Government has indicated on many occasions that it would be willing to help to address the shortfall in funding for the Narrow Water Bridge, but this depends entirely on matching contributions from the other parties, including the Northern Ireland Executive. These commitments have not as yet been forthcoming."
The statement added that the Government “will continue to pursue the project with the Northern Executive through other mechanisms”.
South Down MP Margaret Ritchie said she was "extremely disappointed" by the announcment. But she added: "I am still of the belief that the Narrow Water Bridge would be an important economic stimulus for the local area.
“I would still hope that it would be possible for both governments together to bring forward a scheme for funding this important project. I ould still hope that it would be possible for both governments together to bring forward a scheme for funding this important project.”
Sinn Fein Assembly member insisted the project can still proceed “if the political will exists”.
She said: “The funding necessary to make the bridge a reality was already in place. All that was needed was a commitment for a €6 million funding package from the Taoiseach and the Department of Transport [in Dublin].
“At a time when the construction industry desperately needs investment this project can create 270 jobs for a relatively small investment by the government.”
The proposed development was by Louth County Council in association with Newry and Mourne District Council.
Declan Breathnach, chairman of Louth County Council, said: "If people really want the bridge to happen, as three local authorities and the majority of public representatives do, then it will focus the minds in the Taoiseach's office and the Northern Ireland executive."
Fresh pressure is expected to increase on both the Government and the Stormont Executive. However sources in Dublin said they cannot commit additional funding alone without matching investment by the Northern Ireland Executive. The Department of Finance at Stormont, which finally committed to the scheme in May, has maintained there is no additional cash for the bridge.
"Urgent meetings" are now being sought with Taoiseach Enda Kenny who has voiced his support for the project, First Minister Peter Robinson and Deputy First Minister Martin McGuinness.