The East and North Hertfordshire NHS Trust has confirmed that the proposed £550 million hospital has been shelved, despite years of planning and investment.
The scheme never made it past outline planning stage and a preferred bidder for a design and construction consortium was never finalised, but the news of it being dropped will come as a massive blow to the local authority.
Welwyn Hatfield Conservative MP Grant Shapps said he believes the area has been betrayed.
'This is really simple,' said Shapps. 'We've been completely betrayed by this government. They came here and announced in a fanfare of publicity that a new super-hospital would be built at Hatfield when the former Labour MP Kerry Pollard - who happened to be a government health minister - was clinging to her seat.
'Then after they lost the election, we have lost our proposed hospital. It's the most blatant politicisation of our NHS we have ever seen.'
Doubts were cast over the new super-hospital as long as 18 months ago, chiefly because of its astronomical £550 million price tag.
When the scheme was originally put forward in 2003 the plan was widely supported throughout the government. However, financial problems began to mount last year and it was revealed that only £250 million could be raised to fund the hospital.
The death knell came when the scheme was down-sized and proposed as a district hospital.