First Minister Alex Salmond has accused the UK government of dealing "a near fatal blow" to plans for a carbon capture plant at Peterhead.
Alex Salmond has blamed the UK government for the setbacks
The Scottish Executive had been hoping to get proposals for the £500m green energy plant back on track after BP withdrew its investment last month.
Government funding delays had been blamed for the company's decision.
But in a letter to Mr Salmond, the UK trade and industry secretary claimed proposals "could not be revisited".
In his letter, Alastair Darling confirmed that the government had been considering its support for a carbon capture project, which would provide "carbon-free" electricity from hydrogen, for some time.
He insisted that it had always been clear that a decision would be reached by the end of 2007 and ruled out the possibility of speeding up the process.
BP could not be have been given funding without other companies exploring carbon capture projects being given the chance to bid, he added.
However, Mr Salmond branded it an opportunity almost certain to be missed, and claimed that it was now unlikely that the Peterhead plans for the plant would go ahead.
"This is deeply disappointing. The Westminster government are missing one of the great industrial and environmental opportunities of our times by allowing the timetable for the competition to slip so carelessly," he said.
"What makes it particularly infuriating is the speed with which Aberdeenshire Council and MSPs moved to support this important project and potentially planet-saving technology.
"Only Westminster was asleep on the job and has dealt the project a near fatal blow. It is true that there will be other carbon capture projects in future but London is flinging away a world leading opportunity for Peterhead and Scotland."
Environmental groups have claimed that the setback for the project, which would reduce greenhouse gas emission by capturing carbon dioxide and safely storing it in an oilfield nearing the end of production, is a "disaster".
About 1,000 jobs were expected to be created if the green project was ultimately given the go-ahead.
The Scottish National Party has called for a debate in the Commons on the collapse of BP's investment.
However, Mr Darling claimed that the government was committed to investigating other projects.
"I am very anxious that we drive this technology forward and am keen to see Scotland represented," he wrote.