A multi-million-pound extension to Edinburgh's planned tram network has been shelved.
The proposal for a line running from Haymarket to Granton has been postponed by Edinburgh City Council due to the economic downturn.
The route was planned to service new developments being built at the city's waterfront. But it has been constantly under threat due to funding issues.
It is understood the tram project manager, Transport Initiatives Edinburgh (Tie) and Edinburgh City Council, would have secured a fixed price of £87m to build Line 1b if they could have committed to the project by this month.
In December, the extension was given a four-month stay of execution to try and fill a £50m funding black hole.
It was expected that work would then begin within months on the spur if the Scottish Government agreed to allow the council to borrow against business tax revenue expected to be generated on the waterfront.
Jenny Dawe of Edinburgh City Council, said: "It is disappointing that in the current recession monies are not available to fund Line 1b.
"We will revisit this as soon as economic conditions improve.
"Experience elsewhere also suggests that, once operating, trams prove immensely popular with residents and businesses and they create real demand for expansion."
Tie chairman David Mackay said: "The global economic recession has not spared Edinburgh and as such I believe that it is prudent to postpone Line 1b until such times that the climate for development is far more favourable.
"Our focus in the meantime is the delivery of Line 1a and the creation of a world-class integrated public transport network for the people of Edinburgh."
The Line 1b plan was previously put on hold when the tram plans were scaled back in 2006.
In the same year, a report revealed the 1b link would not bring in any more revenue than buses already do, and can only be justified because of its other benefits, such as encouraging major development in north Edinburgh.
