Fernando Alonso's much-hyped rescue of the Euskaltel-Euskadi cycling team appears to have hit a bump in the road, amid claims that the deal has fallen through.

The Spaniard was asked about the progress of his reported buyout of the Basque squad during a routine presscall at the Singapore Grand Prix, but only confirmed that the deal had still to be finalised. Subsequent reports, however, paint a more gloomy picture.

Current sponsor Euskaltel issued a statement on Monday which announced that 'we could not reach a definitive agreement', and confirmed that it would now press on with the previous course of action and close the team down.

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Alonso, who had hoped to keep the team racing in the cycling world's classic events such as the Tour de France and Vuelta Espana, responded by confirming that he would not be proceeding with the deal, but had not given up on his ambitions to own a team.

"We've tried it until the end, but it's just been impossible to have a cycling team in 2014," the two-time world champion said via his Twitter account, "My passion for the sport remains intact, so this is only the beginning of the future. From tomorrow morning, we are going to work on building, if needs be from scratch, a team we can be proud of."

Alonso's bid for the Euskaltel team made headlines beyond the sport's pages as it appeared that he was poised to preserve the squad's 17-year competition history, and Euskaltel representatives could not hide their disappointment at the outcome of the negotiations.

"It is a sad day for Euskaltel and the team, after the expectations generated by the agreement in principle reached in late August and public statements made at the time by Fernando Alonso and their representatives," the sponsor's statement continued,

"For Euskaltel, [this] is sad news that, after the hope generated by the agreement in principle, it has not been able to conclude a definitive agreement that would have allowed a secure professional future for team members and restored hope to a [team] that has remained true until the last moment."