The Welsh Government has turned down a revised bid for funding from the Circuit of Wales, with the cabinet secretary for economy and infrastructure telling the Welsh Assembly that the risk to public finances of the £375 million project was "unacceptable".
Last week Circuit of Wales developers had put forward a second set of funding proposals after earlier plans - which would have seen 90 percent of the total costs underwritten by the public sector - were rejected by ministers.
Speaking this afternoon in a debate in the Senedd (Welsh Parliament), Ken Skates AM said that any underwriting of the scheme by Welsh taxpayers needed to be "proportionate and fair" with the risks being shared 50/50 with private investors.
Following talks this morning with Michael Carrick, CEO of Heads of The Valleys Development, and Martin Whitaker, CEO of the Circuit of Wales, Mr Skates said that he had concluded that the new proposals still asked too much of the taxpayer - with the private sector only taking on 17% of the risk.
"That amount of risk falling on the Welsh taxpayer - through Welsh Government and local authority support - is unacceptable as it currently stands, especially at a time when we are facing significant economic uncertainty from a UK exit from Europe," he said.
"In our view this project does not currently provide the level of value for money necessary for the amount of public funding being put at risk.
"On that basis I have today told Michael Carrick and Martin Whitaker that I believe further work is needed on this proposal."
He added that his door remained "firmly open" for another revised proposal if the private sector took on more of the risk.
He said: "We need to see at least 50 per cent of this project funded, and 50 per cent of the risk underwritten, by the private sector to justify value for money for Welsh Government and the public purse.
"In the meantime, we will continue to work constructively with the Circuit of Wales team to ensure this project can be successfully delivered to benefit the local economy of Ebbw Vale and Wales at large."
It followed a tumultuous 24 hours for the Circuit of Wales project, with the developers claiming to have the backing of the two local authorities for loan funding, which amounted to around £90 million of the total project costs. The loans were included in the funding package submitted to the Welsh Government, despite a lack of formal approval from Blaenau Gwent and Monmouthshire councils.
While Martin Whittaker had insisted both local authorities were "fully on board" with the proposals, a joint statement by the councils insisted that no decisions would be taken until the outcome of the Welsh Government's deliberations was known.
"Fundamentally, any proposal needs to ensure that it offers value for money for the public purse and reflects an adequate sharing of risk between the public and private sector," said the statement, which added that the councils would subsequently consider their position "once Welsh Government has provided its views on the revised proposals."
With that now being a "no", it would seem to leave the Circuit of Wales plans stalled, with further private finances required to get the project out of the ground.
If the Welsh Government had agreed to underwrite the project, it would not have been liable for the money until after the circuit was completed. In return, it would have been paid £3.8m a year for 33 years.
The project does have private backing from insurance giants Aviva, who will fund the building and development of the land in Ebbw Vale, although has been no reaction oto date from the company on the latest twist in the tale.
The Circuit of Wales also retains a contract to host the British round of the MotoGP championships until 2020. Last year it struck a deal to lease Silverstone for the event is doing so again this year, with the race due to take place on September 4. It had hoped to finally host the event in Wales in 2018 - an ambition that know seems forlorn at best.