Spiralling costs and a budget review at the £70m Wales Millennium Centre opera house has persuaded main contractor Amec to abandon the scheme.

The review comes after the first stage of the tender process in January this year, when it became apparent that the budget would not be sufficient.

Amec decided not to move on to the second phase of the tender process in July and is no longer involved in the scheme.

A spokesperson for Amec said: “We completed the first phase and couldn’t agree terms for the second, so did not take up the second stage of the contract.”

The appointment of a new contractor will be decided during the cost review, which is likely to be completed at the end of September.

The Wales Millennium Centre is now holding meetings with the Millennium Commission, the Arts Council for Wales and the Welsh Assembly to try to secure more funding.

The centre is also meeting the architect Percy Thomas Partnership to look at ways of reducing the cost of the scheme.

A spokesperson for the opera house said: “We are looking to save money and attract extra funding. We know it is going to cost more but need to know how much.”

The project opening will be delayed until 2003, instead of opening at the end of 2002 as scheduled. There is no start date for construction work, but the project is expected to have a two-and-a-half year build period.

One local industry source was sceptical that the project would ever get off the ground.

“If I was standing next to it, I would be holding a mirror to its mouth to see if it was still breathing,” he said.