The UK government has said that the offering of financial support to Harland and Wolff Group shipyards meant "a very substantial risk that taxpayer money would be lost.".
The loss-making multisite shipbuilding business of four yards, comprising the largest in Belfast, two sites in Scotland, and one in England, had applied for a loan guarantee of up to £200 million.
If the loan was granted, it would have allowed the company, with its main shipyard on Queen’s Island, east Belfast, to borrow money with the government acting as guarantor.
However, if the loans were to go bad at the company, which employs 1,500, the government would have had to step in to repay the lenders.
The business secretary, Jonathan Reynolds, said in a written statement: "This decision was based on a comprehensive assessment of the company’s financial profile and the criteria set out in our risk policies.
"We have also decided not to provide any form of emergency liquidity funding.
"The government believes, in this instance, that the market is best placed to resolve the commercial matters faced by Harland and Wolff."
More from BBC News on the decision not to proceed with the loan.
As previously reported on Friday, Chief Executive Officer (CEO) John Wood resigned from H&W, which revealed its bid for state support had been unsuccessful.
Currently, the marine engineering company is in discussions with its US lender, Riverstone Credit Partners, and is hopeful of agreeing to additional funding within days.
