The project to build a 3,000 seater National Badminton Centre on the site of the National Bowl was due to be re-tendered later this year after an earlier aborted competition.
But the sport’s governing body Badminton England said rising construction costs would have placed it at “considerable risk”.
Back in 2013 when the project was first touted to the industry Badminton England had a “manageable” funding shortfall of £1.5m-£2m in 2013, but rising construction costs had increased the shortfall to about £4m.
Funding for the 17 court project and health and fitness club was to be provided from the sale of the existing site for a housing development, as well as backing from Sport England and the Buckinghamshire Lawn Tennis Association.
A spokesman for Badminton England said: “As much as we wanted this project to work, the responsibility to protect the financial health of Badminton England has overridden the opportunities that we saw this project delivering.
“Badminton England will now cease its plans for the new arena facility on the National Bowl and take some time to consider what alternative options it might have.”