The three-day highlight of the jump racing season, postponed in March because of the foot-and-mouth crisis, had been rearranged for 17-19 April.

But a confirmed foot-and-mouth outbreak just five miles from Prestbury Park placed the track within an exclusion zone, which means racing cannot take place.

The announcement, which appeared more likely as the number of cases in Gloucestershire rose, came on Sunday afternoon.

Cheltenham Racecourse said all ticket-holders - and a total of nearly 150,000 badges were sold - would automatically receive refunds.

While an abandonment is a shattering blow for the course and the town of Cheltenham, it will provide a boost to the forthcoming Grand National meeting at Aintree.

Some horses originally bound for Cheltenham will be diverted to Liverpool instead for the three-day meeting there, which starts on Thursday.

And an equivalent of the Cheltenham Gold Cup - although under a different name - plus three other big Festival races, look likely to be run at Sandown Park later in April.

Officials from the Ministry of Agriculture, Fisheries and Food redrew the map of the infected area in Gloucestershire, and Cheltenham Racecourse fell within the exclusion zone.

A statement issued by the British Horseracing Board (BHB) confirmed the abandonment.

The BHB's current policy is that if a course lies within an infected area then that track will not be able to stage a race meeting.

Cheltenham Racecourse managing director Edward Gillespie told BBC Five Live: "I believe it could be the largest ever sporting event in Britain that has been cancelled."

The case, in the village of Woolstone, is about five miles north west of Cheltenham Racecourse.

The original Festival was rearranged after its traditional mid-March slot had to be postponed because the track could not comply with MAFF instructions.

It contravened regulations stating livestock cannot be present on site 28 days before a race meeting by allowing 23 sheep to graze on the course.

And late last month, the eastern boundary of an infected area was drawn up just a mile from the course.

Gillespie said it was important that racing rallied behind the Martell Grand National meeting from 5-7 April.

"It's bad news but we must now all try and get behind the meeting at Aintree," he said.

Big races to be switched?

Contingency plans to run equivalents of the meeting's four main championship races at Sandown Park are already in place.

The Cheltenham Gold Cup, Champion Hurdle, Queen Mother Champion Chase and Stayers' Hurdle would not be transferred in name.

But new races run over similar distances carrying Grade One status would be staged in their place at the Whitbread Gold Cup fixture on 27 and 28 April.

Discussions have been opened with the current sponsors, the Tote, Smurfit Group and Bonusprint over whether they would back the new events which would take place on nine and eight-race cards each day.

Similar arrangements are being considered at Aintree, where Grade Two races could be upgraded to Grade One to make up for lost opportunities.

Many of the 20 races scheduled for Cheltenham will be lost, compounding a miserable year for the sport which has lost scores of fixtures through the foot-and-mouth crisis and bad weather.

Noel Chance, who trained the 2000 Cheltenham Gold Cup winner Looks Like Trouble, welcomed the end to uncertainty over the Festival.

But he added: "It's a big loss on top of the 160 meetings lost already this year."