Liverpool's acceptance as a World Heritage Site was the main trigger behind the demise of Will Alsop's controversial Fourth Grace earlier this week.
Plans to make the project commercially viable raised concerns among the city's increasingly powerful heritage lobby about the additional residential and retail developments sited behind Alsop's muchmaligned 'Cloud'.
With costs spiralling from £228 million to £324 million, the scheme relied on planning permission for the two apartment towers in order to finance the scheme.
There had already been a massive increase in the amount of apartments planned for the site, the initial estimate having doubled to nearly 700 homes.
But there were fears that these fundamental changes would lead to lengthy delays in the planning process and a possible public inquiry because of powerful heritage opposition.
A spokesman for the council admitted one of the key reasons for the ditching of the plans was because the project was becoming residential-driven and that, while the 'Cloud' was not a problem, two new tower blocks were problematic for the World Heritage Site.
A statement from Liverpool Vision, the city's regeneration company, reiterated these concerns. 'It is felt the proposed development has now evolved in such a way that it no longer meets the original scheme agreed by the partners. The additional risks associated have become unacceptably high.'
And, after a meeting of partners Liverpool Vision, the Northwest Development Agency, Liverpool City Council and National Museums Liverpool on Monday, it was decided the project was no longer viable.
David Henshaw, chief executive of Liverpool City Council, said:
'The public-sector partners have been determined to ensure that the Fourth Grace would not be a Millennium Dome mark II. The project was too expensive and would have departed significantly from the envisaged scheme, ' he added.
But Tony Siebenthaler of business lobby group Downtown Liverpool was not impressed by the decision. 'The root cause of the failure was the World Heritage status, ' he said. 'The scheme was unable to be commercially viable because the density and massing of the other buildings would not have been fitting for a World Heritage Site. This has set an awful precedent.
We will not get large-scale, top-quality architecture here unless it is commercially viable.'