Khan remains unbeaten in his professional career so far

The contest was to have doubled as a mandatory defence of the 21-year-old's Commonwealth lightweight crown.

But Khan will instead focus on his bout with Denmark's Martin Kristjansen in London on 2 February.

"With the great end in 2007, this match was to be one of the most eagerly awaited," said British Boxing Board of Control general secretary Simon Block.

But months of tentative negotiations for the domestic super-fight came to nothing.

Thaxton's camp rejected a significant offer from Khan's promoter Frank Warren outside the bidding process, before Khan elected to switch his attention elsewhere just a day before purse offers were due to be opened.

Even if I become world champion I will still come back and fight Thaxton just to shut him up Amir Khan

"The board will be disappointed that Khan has decided not to put himself forward for the bidding process, and also that Thaxton appears to have turned down a career-best purse," said Block.

Khan now faces the possibility of being stripped of his Commonwealth crown with officials due to meet to discuss the fate of that title in due course.

Thaxton had earlier demanded the Bolton fighter be stripped of it if he pulled out of their bout.

Both are the mandatory challengers for each other's belts, but Khan's main priority is to get a world title belt.

"Even if I become world champion I will still come back and fight Thaxton just to shut him up," Khan had said is response to claims from Thaxton that he would "bottle it".

"I fancy the fight more than Thaxton fancies it. I've had challenges in my career since I was 17 and I've always gone in and fought and won and I will do the same with him.

"He needs me more than I need him. He is desperate for that pay day. I want to fight him and I want to make him realise who is the best in Britain."