The National Specialist Contractors Council and the Specialist Engineering Contractors Group will go their separate ways in order to pursue their own priorities.
But SEC Group chief executive Rudi Klein said the lobby was close to securing a date for a DTI select committee on the retentions issue, which is to be chaired by MP Martin O'Neill.
A statement from the CLG said a review had recently concluded that the trade bodies had separate interests.
It is understood that the SEC Group wanted to focus on the role of specialists in the supply chain whereas the NSCC was more concerned about providing services to members.
The statement said: "The majority of challenges they [the NSCC and SEC] and their members are likely to face over the next three to five years can best be addressed by each body individually."
Klein said the CLG had worked over the last eight years to help implement the Latham agenda, and that the conclusion of the work of Sir John Egan's strategic forum at the end of June was the right time for CLG to cease.
MP Clare Curtis-Thomas' early day motion to scrap cash retentions on all public procurement has gained the support of more than 150 MPs.