Brisbane City Council has chosen to scrap its intended Fibrecity scheme, which would have delivered 100Mb broadband to the Australian city.
Campbell Newman, Lord Mayor of the Queensland capital, told ABC News that the council had been unhappy at the progress of negotiations with the UK company and had decided to shelve the project.
The i3 Group has come under continued fire in recent months over its part-complete Bournemouth and Dundee Fibrecity schemes, which were mothballed in October 2010.
And back in January, the firm sold its interest in the flagging UK projects to City Fibre Holdings, signaling an intention to focus on its overseas interests.
As such, the failure to get the Brisbane project up and running comes as another major blow.
Mayor Newman said there were other parties interested in rolling fibre broadband out in the city, and discussions would now take place with them.
"We have been concerned that i3 haven't delivered the information and material we required to properly assess whether we should sign a contract with them," he told the news provider. "We want to protect the interests of the city."