A member of the Jarl squad at the Island Games' opening ceremony

It was announced during the 11th event in Lerwick on Shetland that its only rival, Aland of Finland, was backed by the games' association 33 votes to 21.

Leading councillor Derlwyn Hughes said it was "desperately disappointing".

He said: "We were confident in the strength of our bid, but �land obviously had the upper hand in terms of existing sporting facilities."

We will now take stock of the recommendations, and try to learn from them should we decide to make another bid Councillor Derlwyn Hughes

The support for Aland came as a particular blow after the association's executive committee had endorsed Anglesey.

Anglesey has taken part in the games since the bi-annual event started in 1985, but has never played host, unlike Aland, which won in 2001.

ALAND FACTS Aland is a province of more than 6,500 islands and skerries An independent region of Finland, Swedish is the main language The population is 27,000, with 10,700 living in the only town Mariehamn A regular visitor is tennis legend Bjorn Borg, who appeared on a recent set of Aland postage stamps It is two hours by ferry from Sweden and five hours by sea from Finland

The island games have been staged every two years since they began in 1985. This year's tournament in Scotland has seen competitors from as far as the Falkland Islands and Rhodes.

Gold medal

Mr Hughes said: "Our deputation worked extremely hard after arriving at the Shetland islands to sell the strengths of our bid but it was not to be.

"We will now take stock of the recommendations made by the IIGA (International Island Games Association), and try to learn from them should we decide to make another bid sometime in the future."

Mr Hughes said �1m would still go into upgrading Anglesey leisure centres, even though the island had lost.

Gareth Winston Roberts, who holds the council's economic development portfolio, said: "Securing the Island Games for Ynys M�n was as important for us, as London winning its bid to host the 2012 Olympics.

"The event would have attracted thousands of athletes and supporters to the Island, bringing with them huge economic benefits."

The Anglesey team won a gold medal in the team shooting event on the opening day of this year's games in Shetland.

Aland, which previously hosted the games in 1991, had campaigned for the event to be held outside the British Isles, following the Shetland games and the games in Guernsey in 2003.

It also boasted that its swimming and athletics facilties were better than those on Anglesey.