The 13 million pound Callows Yard redevelopment in the centre of Castletown has been closed down " indefinitely".
The man behind the scheme, Roy Tilleard, says continuing issues with the Health and Safety Inspectorate has left him with no alternative.
And he claims there seems to be little prospect of improvement in the relationship despite his firm " putting considerable effort and resource behind it"" We struggle to see where the problem is".
Mr Tilleard says the site will not be sold and his firm remains committed to developing the town in line with the original plans.
But is this not holding a gun to the head of Government?:
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