Poor leadership was blamed for the collapse of the scheme

It said the fact no-one was in overall charge of the failed �324m project contributed to its demise.

The Cloud building, designed by architect Will Alsop, would have stood next to the existing Three Graces.

It was a central piece of the city's successful bid to be named Capital of Culture 2008.

Mr Alsop, who was critical of the city council after the project was pulled in July, said: "This is not a time for acrimony or recrimination. The scrutiny panel has delivered a thoughtful and pragmatic report.

'Fulfil potential'

"I sincerely wish the city of Liverpool well for the future.

"It is important now that lessons are learned and that leaders continue to focus on sustaining the city's recovery, and fulfilling its potential to become an exceptional European Capital of Culture."

Steve Parry, managing director of Neptune Developments said the The Fourth Grace Consortium had "worked tirelessly" for two years on the scheme.

He added: "It remains our belief that this was a deliverable project that would have created a world-class destination on the Liverpool waterfront.

"The scrutiny panel has produced a balanced and well informed report that proposes a number of constructive and forward-looking recommendations.