Developers have scrapped plans for a £150m skyscraper after failing to raise enough funding.

The 39-storey glass-fronted hotel and apartment complex in Bath Lane, Leicester, would have been the tallest building in the East Midlands.

But developer Westbridge Living has ditched the project after being unable to secure the finance needed.

The Three Towers development, designed by renowned architect Ian Simpson, would have featured a 120m-tall tower along with two smaller towers along the side of the River Soar.

It was to accommodate a 200-bedroom, five-star hotel, 179 apartments, a bar, restaurant and leisure centre.

Talking from a holiday in Abu Dhabi, Ryan O'Neill, managing director of Westbridge, said the developer was unable to raise enough cash from the banks.

He said: "Without bank support it's pretty impossible for a project of this magnitude to go ahead.

"At the moment the market is on its knees and banks are just not lending on large developments.

"This is not a reflection on Leicester, but more of a reflection of the times."

The plans were first put forward four years ago at the height of the property boom.

But following the credit crunch banks are unwilling to back large-scale residential developments.

Mr O'Neill did not rule out building a similar-sized scheme in the city in the future, but said it was impossible to give a timescale.

He said: "It's unfortunate that this is the right deal at the wrong time. If the right time comes again and there's a requirement for this type of building in the city I would look at making it happen."

Nick Carter, chairman of Prospect Leicestershire, the county's economic development agency, said: "It's always disappointing that ambitious schemes of this sort can't be brought to fruition.

"But the investment and development climate has been so widely changed by the global recession that these kind of projects are really no longer viable."

Councillor Abdul Osman, Leicester City Council's regeneration spokesman, said: "This is a sad loss for the city.

"Hopefully, we will find other developers and investors."

Mr O'Neill said Westbridge Living had been put into administrative receivership.

He said the business did not owe any money and had only been created for the Three Towers project.

Other major residential developments in the city have been hit by the economic downturn.

The developer behind the £12m Thames Tower, in Burleys Way, went into administration last year after only selling 14 of the 112 apartments, while the £33m St George's Central development – known as the Blue Tower – in St George's Way, was repossessed by Anglo Irish Bank because of difficulties finding tenants.