Harrison looks set to be forced to wave farewell to his Cup dream

Peter Harrison has suspended his Cowes-based operation after 18 months of talks failed to unearth a major sponsor willing to match his �20m input.

Harrison has not ruled out a rescue package but admitted it was unlikely.

"It is with great disappointment that we have to make this announcement," said businessman Harrison.

The bulk of the 25-strong team of sailors, designers and management in Cowes have been put on notice periods of between one and three months, with a core left to explore late commercial possibilities.

All the team's assets, including boats and equipment, will be readied for either a prompt restart of operations or sale.

It is tragic that no corporate partner has yet come forward to take on this exciting and valuable opportunity Peter Harrison

Harrison bankrolled GBR Challenge for the last America's Cup in 2002, in Auckland, to the tune of �25m.

The team, skippered by Ian Walker, finished seventh out of nine, but Harrison was keen to preserve the legacy he had created and pledged to donate 50% of the projected �40m projected funds needed for Valencia in 2007.

A number of smaller sponsors were found but banking giant HSBC pulled out of major deal at the 11th hour.

Sailing-mad Carphone Warehouse boss Charles Dunstone also joined the project in August with a plan to use the campaign as a vehicle to benefit a major charity.

But with an initial deadline looming on 17 December and the final date for entries approaching in April 2005, Harrison was forced to concede the project looked over.

"We have spent 18 months promoting the team and the event and we had hoped that we would have attracted major corporate backing by now to enable us to compete at the highest level," he said.

Issuing this statement is one of the saddest moments of my life Peter Harrison

Harrison added that it was a "tragedy" that Britain risked not being part of the America's Cup when the race was returning to Europe for only the second time in its history.

"I am still hopeful that partners with vision will come forward to support this team and gain valued return on their investment in what is a major world-class event," he said.

The build-up to the 2007 America's Cup in Spain has already started with three regattas pitting potential syndicates against each other in races close to the shore to raise the event's profile.

Harrison added: "The past four years have been both immensely enjoyable and extremely frustrating.

"Seeing a British boat back competing in the 'World Cup' of sailing was, perhaps, one of the proudest moments of my life.