Industry sources said it was likely that the French construction giant got cold feet in the wake of the terrorist attacks on the US, which have hit the airline and airport industry hard.

TBI had originally opposed the French bid, saying it was too cheap, but had a change of heart when the attacks sent air travel shares plummeting.

More than 70% of TBI shareholders voted in favour of the Vinci offer, but the French company said on Tuesday it had decided to let the offer lapse.

TBI runs Luton airport as well as terminals in Belfast, Cardiff, Sweden and Bolivia.

Shares dive

In a statement, TBI said it was strong enough to go it alone.

"TBI did not solicit Vinci's hostile offer and continues to believe in the prospects of TBI's attractive portfolio of regional assets," it said.

TBI chief executive Keith Brooks said the company was operating in a sector of the aviation industry which was "relatively unscathed" by the US events.

Shares in TBI, which were trading close to 100p when a bidding war seemed likely, were down 20%, to 46p at 1010 GMT on Tuesday.

That values TBI at just under �260m.

Backing out of the deal on a technicality, Vinci said it had not received enough valid acceptances from TBI shareholders for its 90p per share bid.

It said 84% of the company's share base had agreed, short of the 90% that was a condition of the offer.

Ray of light

But there was one ray of light for investors still holding TBI stock.

Crossbill, the investment vehicle of Dermot Desmond and the owner of London's City Airport, revealed it had increased its stake in TBI to 5.08% from 3.3%.

Mr Desmond has previously been rumoured to be putting together a consortium to bid for TBI.