Work was due to begin after the summer on the A338 Spur Road which is one of Dorset’s most notorious traffic bottlenecks.
More than £1m of site preparatory work has already been carried out including protecting the habitat of several species of rare lizard.
Dorset County Council has decided to delay the project after missing out on government funding.
The authority will renew its lobbying attempts after this week’s election while also looking to secure backing from other sources.
One local source told the Enquirer: “It’s not looking good. Word is the whole county’s transport budget could be cut by more than 50% and I can’t see the backers of this getting much joy with the incoming government.”
The road rebuilding scheme is planned to last seven months. Annual repairs for the crumbling route currently cost £1m.
