The £83 million plan to rebuild the Isle of Wight College has been axed, even though £2.5 million has already been spent on plans.
The Learning and Skills Council has told the college it has not won any of the cash it needed to press on with a grand design sixth form and new campus.
The LSC approved only 13 of 180 projects throughout the country, many of which were much more advanced than the Island college, where at least demolition work had not started.