The global "credit crunch" has been blamed for the decision to shelve a multi-million pound redevelopment of Dumfries town centre.
A spokesman for developers Centros said the projected valuation of the scheme had fallen dramatically.
He added that the firm still hoped it might be able to come back to the project at some time in future.
The proposals had been intended to play a major part in the regeneration of the largest town in the south of Scotland.
Dumfries and Galloway Council has described Centros's decision as "extremely disappointing".
It has said it still hopes to take forward the work which has been done on the project so far.
"The projected valuation of the completed project has fallen so sharply that there is now insufficient return"
The plans were centred on creating a new road linking the High Street to the Whitesands.
It was also hoped a major department store could be attracted to the town.
"What has happened is that the global credit crunch has affected UK retail investment markets," said Centros spokesman Steve Bryson.
"The projected valuation of the completed project has fallen so sharply that there is now insufficient return to justify any further capital expenditure on it at the moment."
He said the firm was "frustrated and disappointed" at the situation.
However, he added that if markets settled down it might be possible for Centros to take the scheme forward at a later date.
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