The husband of a woman killed in the IRA's bombing of a Shankill Road fish shop says the halting of the Maze peace centre is a "missed opportunity".
The Special EU Programmes Body (SEUPB) confirmed yesterday that an €18m pot of funding for the project had been withdrawn because the plan is "no longer viable".
Victims had staged protests and expressed anger at the proposed peace centre voicing fears it would become a shrine to the 10 republican hunger strikers who died in the prison hospital.
Protestant campaigner Willie Frazer even threatened to bulldoze the remaining buildings on the site, which include the former hospital and a H-block.
However, it was First Minister Peter Robinson who effectively stopped the project in August when he said that it would be "wrong to proceed in the absence of a consensus about how it will operate".
The European funding from the Peace III pot will now be allocated to other projects in Northern Ireland and the border counties.
In a statement, SEUPB said it had withdrawn the funding following discussions with the lead partner – the Office of the First and Deputy First Minister.
Yesterday Mr Robinson said the issue with the peace centre was "not funding, but on the level of support for it to proceed".
"What was required for the peace centre to proceed was a broad level of support across the community and if at any time that could be achieved there would be other opportunities for funding," he said.
Alan McBride, who lost his wife and father-in-law in the Shankill bomb, said he was disappointed that the centre was not going ahead, describing it as an "imaginative project".
He insisted that the victims' community was divided over the issue and not universally opposed to the centre. "It did not receive unanimous support from the victims community but it would be unfair to say that it was universally condemned as well," he said.
"It didn't have to be a shrine to terrorism. It could have told a story in a way that is sensitive and have contributed to peace.
"But the most frustrating thing of all is the fact that our politicians, so many years after the peace agreement and devolution, that we are still not able to agree these things.
"We are still a very immature democracy, if you just look at some of the issues we are facing at the moment, the money that has been squandered and wasted.
"Here is the opportunity to create jobs and do something positive. I think the people of Northern Ireland are going to be the big losers in all of that."
The announcement was also a disappointment to the construction industry. John Armstrong, managing director of the Construction Employers Federation, hit out at Government in frustration saying it was the latest disappointment on top of the delays on the A5, the policing college in Desertcreat, two stadiums in Belfast and funding problems with the Narrow Water bridge.
"Every project that is stalled or scrapped costs jobs and hinders economic recovery. The industry is immensely frustrated."
The Ulster Unionist Party welcomed the halt to the peace centre, but urged the redevelopment of the site.
The Alliance Party blasted Mr Robinson as "cowardly".
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The plans for the 347-acre site of the former Maze prison included a business campus for enterprises and research and development facilities.
Wartime hangars were to be restored for the Ulster Aviation Society. Around 200 residential units, sports and leisure facilities were planned.
The Balmoral Show also relocated to the Maze.