Plans for the much-debated Guggenheim museum in Helsinki have fallen through after city councillors rejected a proposal to provide state aid for the project’s development.

During recent budget talks, the co-ruling nationalist Finns party objected to the €40m (US$42.4m, £33.5m) support costs offered by the government, especially during a time when Finland’s economy is struggling while the government pushes through a multi-billion Euro austerity measure to try and curb public debt growth.

The contentious scheme was torpedoed after councillors voted 53 to 32 against for partial funding of the project, following five hours of debate before the decision.

Speaking to the Helsinki Times, Solomon R Guggenheim Foundation director Richard Armstrong said that the decision not to allocate funds for the proposed museum, in effect was “bringing this project to a close.”

The foundation also confirmed that after five years of trying to bring the project to the table, the latest rejection means no further alternative funding options will be put forward.

According to an assessment made by the City, the museum would have increased Helsinki tourism and annual spending by visitors by at least €16m (US$17m, £13.4m), also boosting employment.

The competition to design the gallery waswon in 2015 by Paris-based Moreau Kusunoki Architects, which topped a list of more than 1,715 submissions from close to 80 countries.