Commonwealth Games chiefs said Monday they were looking for a new venue for the 2022 edition after announcing scheduled hosts Durban had failed to meet "key obligations".
Last month, South Africa sports minister Fikile Mbalula indicated the government might withdraw its financial support because of the cost of staging the multi-sport event, saying "we cannot live beyond our means".
Following a meeting in London, Commonwealth Games Federation (CGF) president Louise Martin said Monday: "The CGF is actively exploring alternative options, including a potential replacement host."
The mayor of Liverpool said last month the northwest English city would be prepared to host the 2022 Games if they were no longer in Durban.
Confirmation that the Games would not be staged in Durban came from South Africa Sports Confederation and Olympic Committee (SASOC) president Gideon Sam.
In an interview with South Africa's eNCA TV news from London, he said: "Durban did not withdraw..,
"The CGF gave the country certain conditions… we were supposed to 1) sign a contract agreement, 2) have an LOC (local organising committee) in place, 3) have a CEO (chief executive officer) appointed.
“At the (CGF) executive meeting on Saturday they decided that it is not forthcoming and they need to move on and find another city."
Durban 2022 would have been the first edition of the Commonwealth Games held in Africa.
"The CGF will continue to have an open dialogue with the SASOC and the Republic of South Africa and remains committed to realising the shared ambitions of a future Commonwealth Games in Africa," Martin added.
"The CGF is fully confident and committed to delivering a successful Commonwealth Games for athletes and fans in 2022."
- 'Significant departure' -
The CGF said they had completed their review of the "final information" submitted by South Africa on November 30 to determine whether their proposals for hosting the 2022 Commonwealth Games honoured their original commitments.
"It is with disappointment that the detailed review has concluded that there is a significant departure from the undertakings provided in Durban's bid and as a result a number of key obligations and commitments in areas such as governance, venues, funding and risk management/assurance have not been met under the revised proposition," the statement added.
Durban was named as the 2022 Games host in September 2015 but Mbalula said in February that the South African government and the CGF had still to reach agreement over costs.
"It does not look like we will find each other," said Mbalula. "We have given it our best shot, but we cannot live beyond our means."
According to authorities, a budget of 6.4 billion rand ($492 million, 465 million euros) has already been set aside for the Games, in a country battling high unemployment and poor growth.
- 'Millions of rands wasted' -
Before the CGF issued its own statement, there was an angry response from South Africa's main opposition party which slammed the "millions of rand" already "wasted" on a bid where "good money has been thrown after a bad idea" by the country's governing African National Congress.
Zwakele Mncwango, the provincial leader of the Democratic Alliance (DA) party in the Kwa-Zulu Natal region that encompasses Durban, said: "This is a devastating blow to our city, and our people, who can only stand by and watch as millions of rands that could have improved our communities, delivered houses, improved services and created jobs have been wasted by the ANC government."
Both the 1995 rugby World Cup and the 2010 football World Cup in South Africa are seen as milestones in the country's efforts to promote national unity since the apartheid era.
The Commonwealth Games is restricted to countries that are members of the Commonwealth, a collection of nations that were mainly once part of the British Empire and whose titular head is Britain's Queen Elizabeth II,
It was known as the British Empire Games when first staged in 1930.
Monday's announcement came as the Queen sent the Commonwealth Games baton off from Buckingham Palace on a relay that will see it visit every member nation ahead of the 2018 edition on Australia's Gold Coast.