The council agreed terms earlier this month for the £6m purchase of the complex from its current owner, Manchester-based company Barnaway.

The flagship site, on prime development land near Wetherby, would then have been leased back to United.

Council bosses also warned, however, that the proposed deal was subject to the satisfactory completion of due diligence checks.

Those checks had to be done and dusted before midnight last night, when the club's exclusive option to buy Thorp Arch from Barnaway for a fixed price of £6m expired.

Yesterday it appeared the deal was set to go through, with the council's joint leader, Coun Andrew Carter, saying "most of the work" had been finished.

But, in a statement today, United revealed the midnight deadline had passed without the option being exercised.

Leeds also said the decision not to proceed had been taken because of conditions the council sought to attach to the deal.

The club will still be able to stay as tenants at Thorp Arch for the next 20 years, under the terms of the site's original sale to Manchester businessman Jacob Adler.

But once the lease runs out, there would be nothing to stop the facility's owner of the time evicting United.
Barnaway could in theory agree to sell Thorp Arch to Leeds or a third party prior to the expiry of the lease.

The amount the buyer would have to pay, however, is no longer fixed at £6m.

Thorp Arch's current market value is estimated to be £11m.
Reacting to the collapse of the deal, Coun Carter said: "There were certain conditions that had to be met in the interests of protecting the council taxpayers' position.

"We would have very much liked to have moved ahead with this but protecting the council tax payers' position was always in our mind.
"The negotiations have been conducted professionally, and in a good spirit, and the council, like the club, wishes to thank all of those involved."

Leeds would have surrendered their exclusive option on Thorp Arch to the local authority to allow the proposed deal to be done.

The club, then under the chairmanship of Gerald Krasner, sold the site for £4m in 2004 as it tried to stave off financial collapse.