Liverpool:Everton's plans to leave Goodison Park, the club's home for 117 years, for a new 50,000-seat stadium outside the city of Liverpool have been blocked.
The new stadium was to have been built as part of a new retail park in the nearby town of Kirby in partnership with Britain's biggest supermarket chain, Tesco.
But the proposed 400-million-pound development will not now go ahead after the British government ruled that it could drain jobs and spending from surrounding communities in what is one of the poorest regions in England.
The decision is a serious setback for cash-strapped Everton's hopes of enhancing the club's ability to generate match-day revenues.
Goodison Park, described as "crumbling and hopelessly inadequate" by local newspaper The Liverpool Daily Post, has a capacity of 40,158 which cannot be increased. It also has limited facilities for corpororate entertainment in comparison to most of the club's Premier League rivals.
Everton chief executive Robert Elstone said he was "bitterly disappointed" by the government's decision.
He added: "We will now regroup and carefully consider the options which are open to us. I feel I must stress that we do remain totally committed to finding a new home for our football club. The hunt for that new home will now intensify."
The collapse of the Kirby stadium plan could reignite discussions on Everton sharing a stadium with near neighbours Liverpool FC, who have themselves been forced to shelve plans for a new 60,000-seat stadium because of financial constraints.
The idea of sharing a stadium on the model of AC Milan and Internazionale at the San Siro has been ruled out by both clubs in the past but is supported by local politicians and could now return to the agenda.
Goodison has been Everton's home since 1892, when the club moved from its former base at Anfield, which was taken over by Liverpool FC.
The proposed move to Kirby had been projected to increase Everton's annual revenues by around six million pounds a year, substantially increasing manager David Moyes's ability to strengthen what is one of the smallest squads in the Premier League.
Everton have punched above their weight recently, finishing fifth in the Premier League in the last two campaigns as well as reaching this year's FA Cup final.
The club was howevever unable to resist a 22-million-pound offer from Manchester City for key defender Joleon Lescott in the close season and his departure, combined with a string of injuries, have contributed to a sluggish start to this campaign.
A 3-2 defeat at Hull on Wednesday left Everton 14th in the table and prompted a warning from Moyes that the club could easily find itself involved in a relegation battle if performances did not improve.