Plans for a £5 million higher education institution on the site of the former Castle Mona Hotel have been scrapped.
However, the project remains under consideration at potential other sites, including the Nunnery.
The former Castle Mona Hotel in Douglas has lain empty since its closure more than six years ago and had been identified by the Manx Educational Foundation charity as suitable to set up a new information and computer technology university.
Complications, including the cost of rebuild and refurbish, means that is no longer an option but attention is moving elsewhere.
One of the political members supporting the project, MHK Laurence Skelly, says it remains very much alive.
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