The debacle follows the FA's admission that the project was doomed without government aid.
A spokesperson for FA subsidiary Wembley National Stadium Limited this week confirmed that design work on the project had been shelved. The plan will be reviewed by a cross-departmental working party to be chaired by home secretary Jack Straw.
The spokesperson refused to confirm that a £326.5m guaranteed maximum price bid made by Australian contractor Multiplex last November was now defunct. However, he added that the issue would be addressed in a crisis meeting of the WNSL board, which was to be held as Building went to press last Wednesday.
The spokesperson said the FA had already spent more than £30m on consulting fees, including payouts to project architects Foster and Partners and HOK Sport, engineer the Mott Consortium and QS Franklin + Andrews.
David Hendry, project director for Multiplex, said on Wednesday that his 30-strong team was continuing to work on the project. Multiplex is understood to have spent £18m so far.
He said: "Until we are told anything officially by Wembley National Stadium, it is business as usual. We are carrying on as normal." The crisis follows the refusal of banks to stump up £410m in funding unless the FA raises its equity stake in the scheme from £40m to £125m, as well as taking on £55m a year in debt servicing and liability for construction cost overruns.
WNSL had hoped that the FA would approve a revised business plan, incorporating these requirements, before it was due to go back to the City this month. However the FA rejected the plan on Tuesday. It said: "We cannot hold the development of football in this country to ransom on the hope that this project will work." A spokesperson for the Department for Culture, Media and Sport this week confirmed that: "The stadium as designed will now not be built." The ministerial working party was instructed to review the need for a national stadium and the suitability of the Wembley site by the prime minister's office on Tuesday.
The government will appoint an independent stadium specialist to advise the working party in the next three weeks.