Sir Michael Grade, chairman of Pinewood Shepperton Studios, has been forced to abandon an ambitious plan to create a state-of-the-art £69m film studio in Canada due to lack of support.

Pinewood Shepperton teamed up with British film directors Ridley and Tony Scott to form a consortium to build a huge facility on a derelict site in Toronto.

However, the consortium has admitted construction work on the planned 1 million square foot complex, due to start last month, will no longer go ahead after public backing for the project stalled and commercial tenants failed to come forward in sufficient numbers.

"Without the commercial tenancies we anticipated and the credit support needed to finance this specific transaction, we are left with a project that is not compatible with our investment profile," Sequence Development Group said in a statement.

Launched at a press conference last February, the studio aimed to draw more Hollywood film makers to Canada.

US movie makers have been crossing the border in increasing numbers since 1998 when Canada introduced tax breaks for film production.

While competing film centres in Vancouver and Montreal already attracted big budget Hollywood productions, the lack of large scale studios was thought to be holding Toronto back.

At one stage in the planning it was even envisaged that Shepperton Pinewood would move some of its productions - including those directed by the Scotts - to Toronto if both UK studios were full.

The brothers bought Shepperton Studios in 1995 for £17.5m, later merging it with Pinewood.

However, the Toronto Economic Development Corporation, which owns the port area where the studio was to have been built, said it would press on with alternative plans to build a major complex.

Jeffrey Steiner, the president and ceo of TEDC, said he was disappointed Sequence had withdrawn but was committed to seeing the film complex built.