A building designed for the South Bank by one of the world's top architects has been scrapped over fears about the credit crunch.

Internationally renowned Zaha Hadid's design for a £5 million HQ for The Architecture Foundation was to be the architect's first in England, having built her reputation with high-profile works abroad, including the Tram Stat ion in Strasbourg and the Contemporary Arts Center, Cincinnati.

But senior members of the foundation said they were unable to guarantee enough money from donors to cover costs because "economic nervousness" and a fall in the stock market had created a bad fundraising environment.

The decision will be a blow to the Iraqi-born Briton, who is also one of the consultants on the £40 million Olympics aquatic centre for the 2012 Games.

Rowan Moore, director of the foundation, said: "We are obviously disappointed not to be able to proceed with Zaha Hadid's wonderful plans but we must adapt our programme to suit the times. A great many people have put a huge amount into the project, and we're very grateful to everyone, particularly Zaha."

The HQ, in Southwark Street, would have provided exhibition and event spaces and offices for the foundation and was due for completion in July next year.

Hadid won the right to design the building in a competition in 2006, funded by developer Land Securities.

She was told of the decision last week following an emergency meeting of the Foundation's trustees.

She said: "It is disappointing. As a catalyst for architectural discussion, the foundation deserves a permanent home that reflects its vision.

"I would like to thank everyone involved with the project and look forward to The Architecture Foundation's continued development." The foundation's future programme comprises exhibitions, research and policy work.

Foundation sources said a headquarters was now "extremely unlikely".

• 

  Lenny Henry: 'Maybe one day we can have a black Doctor Who'

  As he wins the outstanding newcomer prize at the Evening Standard theatre awards for his role as Othello, Lenny Henry has come a long way from black and white minstrels

  ---

• 

  Spread of the Jedhead

  Jedward, voted off the X-Factor this weekend, are the most obvious proponents of the sticky-uppy look - but the style crosses boundaries of age, gender, sexuality and taste, says Nick Curtis

  ---

Sky in plot to hire students on the cheap

Sky News is currently recruiting students as reporters for its coverage of next year's general election. However, the opportunity doesn't quite seem so appealing

All stories