The last direct Aberystwyth to London train service stopped in 1991
A proposed direct train link between Aberystwyth and London has been rejected by the Office of Rail Regulation (ORR).
Arriva Trains Wales (ATW) is "extremely disappointed" the twice daily service to Marylebone station was turned down.
The ORR said it was concerned about the "financial viability of the proposed new service".
It would have run via some of the same stations used by the Wrexham and Shropshire rail route to Marylebone.
Wrexham and Shorpshire (W&S) expressed fears last year a rival service could put it out of business.
But ATW said its rail link would have boosted the economy and tourism in mid Wales and Shropshire.
A spokeswoman said: "We believe that a direct rail link to London would boost the economy and tourism in mid Wales and Shropshire, providing valuable additional services to local people.
"Aberystwyth will remain one of the few towns left in Britain without a direct link to the capital after the last link to London was withdrawn in 1991."
In a letter Arriva, the ORR said it was concerned about the "financial viability of the project.
"We have assessed the business case put forward by ATW and remain concerned about the financial viability of the proposed new service.
"To generate a profit we consider there would be two options open to ATW: either to generate additional revenue; or to increase revenue abstraction.
"As discussed above, we consider it extremely unlikely that ATW would be able to generate sufficient new revenue to cover its forecast operating costs."
Ceredigion MP Mark Williams said he was "appalled" by the ORR's decision.
He added: "Aberystwyth is a growing community, as has been recognised by the Welsh Assembly Government, and has many thousands of students, and would no doubt attract more visitors if it was more easily accessible.
"Any arguments about a perceived lack of patronage simply don't hold water."
In April last year, Virgin trains dropped plans to run a competing service between Wrexham, Shropshire and London after W&S said it may not survive.
Wrexham MP Ian Lucas welcomed the ORR's decision, which he said should safeguard train services in his constituency.
He said he made representations to the regulator about Arriva Trains Wales's proposal.
The MP added: "There would have been no benefit to Wrexham under these plans, but a service which has become well-liked in the town, and which provides local people with jobs, would have been threatened.
"The rail regulators have made the right decision."