Sebastien Sainsbury's bid to take control of Leeds has ended in failure.
Leeds' future remains unresolved
Sainsbury, great grandson of the founder of the supermarket chain, has been trying to buy the cash-strapped club since October.
"Sebastien Sainsbury's lawyers have informed Leeds United's lawyers that they'll no longer be bidding to take over the club," said a Leeds statement.
"Negotiations with other parties are ongoing. Further information will be supplied if they come to a conclusion."
Local property developer Norman Stubbs is believed to be the single remaining party continuing talks with the current board.
Sainsbury, who has failed with two previous attempts to take over the club, said: "I am really depressed.
"I really wanted to get something done for the sake of Leeds United and their fans and I am sick to my stomach that I have not been able to do so.
"But upon completion of due diligence by our potential funders, the true scale of Leeds United's debt and liabilities have become clear.
"It was obviously more than we, they, and many others had envisaged."
It is understood given Leeds' current liabilities, it would take £40m to stage a takeover, but they club will also lose £10m over the next six months.
It leaves Leeds standing on the brink of administration, potentially within the next three months.
And should the club be served with a winding-up order, they would suffer an automatic 10-point deduction by the Football League.
As a result, relegation from the Championship would be a very real prospect.
Sainsbury hopes it will not come to that.
He added: "I have developed a real affection for this football club and I still hope there's a way to save Leeds United.
"There's no way I want to see it go into administration, but should that happen, I will not try to rescue it."