"Our negotiating partners have not been able to secure the investor support that is required in order to deal with the obligations of this agreement," Prime Minister Bruce Golding was quoted as saying in the Jamaica Observer newspaper.

Jamaica had extended talks with the Brazilian investors at least two times in 2008 as part of an on-going effort to privatise the sugar mills.

Infinity Bio-Energy had emerged last year as the sole bidder for the debt-laden estates, which have the capacity to crush 1.4 million tons of sugarcane. Infinity Bio-Energy was slated to take 75% stake in the sugar mills

With no immediate deal in sight, Jamaica will shutter the money-losing industry, media there reported.

"What we are not prepared to do is contemplate an industry that will continue to suffer the amount of losses it always has," Golding was quoted as saying.

Revelation that talks have deteriorated even more will likely delay funding the Caribbean island nation gets from the European Union.

In January, the EU suspended some disbursement payments because of Kingston’s failure to divest the sugar estates.

The EU drafted the programme to help Jamaica transform its sugar cane industry after European nations cut subsidies.

Meanwhile, the Gleaner newspaper reported that Kingston may issue a new call for bids to unload the mills from its books.