Plans for a cross-border bridge at the site of one of the worst atrocities of the Troubles have been dealt another blow after funding from Europe was pulled.
The Special European Union Programmes Body (SEUPB) had pledged 17.4m euro (£14.5m) towards the Narrow Water project but has withdrawn its offer because additional funding had not been found.
A SEUPB statement said: "Following comprehensive discussions on the financial viability of the Narrow Water Bridge with the project's lead partner (East Border Region Ltd and Louth County Council), the SEUPB has decided to withdraw the letter of offer. The additional funding required to deliver the project has not been secured."
The decision has sparked outrage on both sides of the border.
South Down MP Margaret Ritchie said: "I am extremely disappointed that the SEUPB find themselves in this position of withdrawing funding.
"I am still of the belief that the Narrow Water Bridge would be an important economic stimulus for the local area of South Down and Co Louth in terms of job creation, investment and tourism opportunities. I would still hope that it would be possible for both governments together to bring forward a scheme for funding this important project."
Ms Ritchie also questioned the timing of the announcement which comes ahead of a meeting on the issue with Northern Ireland's First and Deputy First Ministers at Stormont on Monday.
Declan Breathnach, chairman of Louth County Council, said the decision should focus minds.
"It was not unexpected. They are under severe pressure to spend," he said.
"I think this should focus the minds on what is a shovel ready project and if people really want the bridge to happen, as three local authorities and the majority of public representatives do, then it will focus the minds in the Taoiseach's office and the Northern Ireland executive."
The Fianna Fail representative said he expects the SEUPB will find it difficult to find another project so well developed.
"If there's a will to come up with the shortfall in finance then it has to be a willingness in the NI Executive in connection with the southern Government," he said
The Narrow Water cable-stayed bridge, 195m long, has been in the planning for at least five years and would have connected Cornamucklagh near Omeath, Co Louth with Narrow Water near Warrenpoint, Co Down, at an historic crossing point.
The entire build would have been 620m long and it had been hoped it could be open by 2015.
Backers of the scheme claimed it was crucial to the prospects for economic regeneration and reconciliation of the border community in Louth and Down.
Stormont's Finance department was the last body to commit to fund the scheme with £2.7 million allocated to the bridge. In May, Finance Minister Sammy Wilson gave approval for the project on a number of financial conditions and undertakings from both Louth and Newry and Mourne councils.
In July however, council bosses in Co Louth pulled out after bids for the job from construction firms came in substantially above budget.
Narrow Water was the spot were a convoy of British paratroopers were blown up by a remote control roadside bomb in 1979. It was the Army's greatest loss of life in one day in Northern Ireland with 18 soldiers killed.
The SEUPB said it was now looking to reallocate the funding to other eligible projects.
A spokesman added: "The SEUPB is now exploring options for the reallocation of this funding to eligible projects capable of being delivered by December 2015 to ensure that the drawdown of funds from the European Commission is maximised and that no money is lost to the Northern Ireland or Ireland economies."
The Sinn Fein Louth TD, Gerry Adams, said representatives of councils in Louth, Newry and Mourne and South Down would be seeking an urgent meeting with the Taoiseach and Tanaiste, and with the First and Deputy First Ministers.
He added: "During the week the Taoiseach expressed his support for the Narrow Water Bridge project and most of the money necessary to bring it to conclusion is in place, the onus is now on the Dept. of the Taoiseach and the Dept. of Transport to come up with the relatively small amount needed to make this project a reality."
SDLP MP Ms Ritchie said any decision should have waited until after meetings with the Taoiseach and the First Minister and deputy First Minister to ascertain if the funding gap was going to be met.
She said: "While we are in no doubt that the problems with funding arose due to the underestimation in the costs of the project by Co Louth Council, we were all in agreement, including the SEUPB, as proven by independent advice they sought, that the Narrow Water Bridge project would be a economic catalyst for the development of South Down and Louth, and was value for money."
Ms Ritchie added: "The SEUPB have been premature in their decision to withdraw funding, and in doing so have taken the pressure of the NI Executive and the Irish Government to step in with the additional funding required that would bring this once in a lifetime economic opportunity to life, and provide the economic stability and tourism opportunities that would have flowed after the construction of the bridge. Why did this happen now? Why make this statement in advance of the high level meeting next Monday?"
The Irish Government in Dublin said it remains supportive of the concept of the Narrow Water Bridge and that it was disappointed the tender process resulted in a much higher price than anticipated.
"The Government has indicated on many occasions that it would be willing to help to address the shortfall in funding for the Narrow Water Bridge, but this depends entirely on matching contributions from the other parties, including the Northern Ireland Executive," said the Department of Transport, Tourism & Sport.
"These commitments have not as yet been forthcoming."
It said while the SEUPB has withdraw its funding, it is exploring options for the reallocation of this funding to eligible projects capable of being delivered by December 2015.
"It has regrettably not proved possible to bridge the large funding gap on the Narrow Water Bridge project," it added.
"However, the Irish Government will continue to pursue the project with the Northern Executive through other mechanisms."