Paul Potts: The Movie, about the first Britain's Got Talent winner's rise from mobile phone salesman to opera star, has been axed.
Simon Cowell had developed a script and sold the rights to Paramount Pictures, and the movie - to be called One Chance - was to be directed by Kick-Ass's Matthew Vaughn.
But Matthew told The Sun: "It should have gone ahead - Simon and I had a good vision for how the film should be, and it would have been brilliant, but the studios were umm-ing and ahh-ing and they missed the opportunity to do it."
He added: "It's tragic, because the script was brilliant. Simon had done a great job. I was looking forward to working with him and it would have been a big hit."
Sources claim producers were struggling to cast an actor in the starring role.
Paul, 39, apparently said he wanted Shaun Of The Dead star Nick Frost to play him.
But Matthew predicts the X Factor boss will still become a movie producer.
He said: "His biggest skill set is understanding what the public wants. Judging by the script he gave me, film will be the next conquest."
Simon said when he signed with Paramount in 2008: "Most of these calls result in absolutely nothing, but this company got that it's another Billy Elliot, a story anyone in the world can understand."