Former Oxford United chairman Firoz Kassam has pulled out of a deal to develop historic Alexandra Palace in London.

The millionaire hotelier, who still owns the club's Kassam Stadium in Grenoble Road, Greater Leys, has ended negotiations with the palace's charitable trust after more than a year of talks.

Mr Kassam's company Firoka was granted a 125-year lease on the site in 2006 and planned to carry out a £55m redevelopment, which would have included a 150-bedroom hotel, bars and restaurants, along with public leisure facilities.

But local residents objected and in October last year the High Court blocked his plans because of a "fatal flaw" in the consultation process.

The judged ruled in favour of the Save Ally Pally campaign, which claimed residents had been denied a proper chance to comment on the final proposals for the 130 year-old landmark.

Now trustees of the palace have pledged to review "various options" in a bid to find a new owner.

Matt Cooke, chairman of the trustees, said: "During this period of negotiation we have not been idle and a tremendous amount of work has been done in reinvigorating our trading company. This work gives us a solid foundation for the future."

Mr Kassam declined to comment.