Ministers refused pleas for a £210m guarantee leaving backers of the project reeling.

Circuit of Wales chiefs were hoping to start construction within weeks but have now been forced to reconsider their plans.

In a statement they said: “Along with my team and commercial partners, I am hugely disappointed and saddened that the Welsh Government has failed to support The Circuit of Wales, what would be a game changing development for Wales and in particular the people of Blaenau Gwent.

“We strongly disagree with the decision and the rationale behind it.

“We have always believed passionately, and continue to do so, in this project’s ability to transform and provide opportunities and hope to one of the poorest parts of the UK, not just Wales.

“The project is totally defined, finance is in place, and construction and hiring could start immediately.

“My team and I will now analyse the Welsh Government’s reasons not to support the development and are actively seeking additional clarification from them.

“We will then very shortly issue a detailed response before deciding on our next course of action.”

The Welsh Government was not keen on having debts associated with the projects on its books and feared the cost of underwriting it would hamper funding plans for other projects.

Spanish contractor FCC and local civils specialist Alun Griffiths were originally lined up for the job but Alun Griffiths passed on its headline role to Irish contractor Roadbridge.