Sweeping plans to reform America's intelligence network have run into trouble after key Republicans in Congress objected to the legislation.
Dennis Hastert had to admit defeat in his efforts to get the bill through
House of Representatives Speaker Dennis Hastert cancelled a vote on the bill at the last minute, making it unlikely to pass in this session of Congress.
The shake-up, prompted by the Senate 9/11 Commission, would have created a new national intelligence director.
But some senior figures had argued the overhaul went too far, too fast.
The surprise setback for the President Bush-backed bill comes despite the fact that both houses of Congress have already approved the measure, known as the Intelligence Reform and Terrorism Prevention Act.
However, the Senate and the House passed radically different versions of the bill and a compromise deal had to be negotiated.
The decision to cancel the vote has drawn sharp criticism from Democrats, who say the move has essentially killed any chance for intelligence reform this year.
If the bill cannot be salvaged next month, it will expire at the end of this year, forcing lawmakers to start again from scratch when the new Congress convenes in January.
Mr Hastert withdrew the amended bill after objections by some Republican members of the House, including Duncan Hunter, who is chairman of the chamber's Armed Services Committee.
Mr Hunter - seen as an important ally of Defence Secretary Donald Rumsfeld - was concerned that shifting some intelligence operations from the Pentagon could make it difficult for combat troops to get the information they needed, Mr Hastert said.
The Pentagon currently controls 80% of the intelligence budget - and some congressional aides accused Mr Rumsfeld's department of conspiring to block the bill.
The intelligence shake-up was prompted by the investigation into the 11 September 2001 attacks on the US and followed some of its recommendations.
These included the creation of a new national counter-terrorism centre with powers to plan operations.
The Senate 9/11 Commission found that a failure to co-operate between 15 military and civilian intelligence agencies hampered efforts to defend the US in the run-up to the attacks on New York and Washington.
But Mr Rumsfeld had expressed concerns about the reform, saying it might create barriers between intelligence agencies and senior military commanders.