Ambitions to bring back trams to the streets of Hampshire have finally been quashed by the government.
Rising costs have seen the government's support disappear
Transport Secretary Alistair Darling has again refused to back a scheme to link Fareham, Gosport and Portsmouth with a hi-tech tram route.
Mr Darling had first decided to withdraw funding for the South Hampshire Rapid Transit scheme in 2004.
His decision not to back revised plans - on which £10.5m has been spent - has left the scheme's backers "devastated".
Hampshire County Council chiefs say the tram scheme was essential because of the government's "massive housebuilding ambitions for the South East".
They claim the tram scheme would have taken three million car journeys off the road every year.
Councillor Ken Thornber, county council leader, said: "I'm devastated to hear this news, and appalled that we have had to wait so long for this short-sighted decision and the long wait from government to make up its mind.
"We think the government is simply using inflation, much of which was caused by its delays, to justify dropping the project on the grounds of cost - but we need time to clarify this."
Portsmouth City Council leader Gerald Vernon-Jackson said: "We have known for nearly a year that the government didn't favour the scheme, but they should have told us rather than let the proposal wait on a ministers desk."
Mr Darling, who earlier this month also dismissed plans for trams in Leeds, said: "I took the decision to withdraw funding for South Hampshire Rapid Transit proposal in July 2004. This was because costs had escalated considerably.
"It is clear that this scheme is still very expensive and the costs remain much higher than originally planned.
"Whilst the government supports tram schemes in the right places, it does not do so at any cost."
The scheme was first approved in 2001 with £170m of public money earmarked for it.
But the need to dig a deeper tunnel in the harbour to accommodate larger warships brought a higher price tag.
Higher insurance premiums and inflation in construction costs were also blamed for the escalating costs.