Everton's plan to build a 50,000-seat stadium in Kirkby has been rejected by the government because of the "negative impact" of the development on surrounding areas.
The proposed £150 million stadium was to be the centrepiece of a huge retail development in Kirkby, a scheme driven by the supermarket company Tesco. However communities secretary John Denham is believed to have decided the impact of the retail park on neighbouring areas - with local authorities in Liverpool, St Helens and Sefton all objecting - outweighed the regeneration benefits for Kirkby.
The club had been hopeful that the new stadium would massively increase potential matchday revenues and make Everton a more attractive proposition to prospective wealthy investors.
George Howarth, the MP for the Knowsley North and Sefton East constituency, where the stadium was to be built said: "I deeply regret this decision in a time of significant economic challenge to the whole of Merseyside during a recession."
The decision means Everton have now failed three times during the Premier League era to move from Goodison Park.