Restaurant group and concessions business Peyton and Byrne has walked away from its £20m Brighton Dome and Royal Pavilion deal just 18 months after it was won.
The company said in a statement that it had entered into the seven-year contract with "enthusiasm and considerable investment", but now feels that the project doesn't fit with the core activities of the business in London.
It was reported at the time the contract was awarded that around £600,000 would be invested in the facilities, but it wasn't clear how much of the bill would be footed by each of the parties involved.
Peyton and Byrne will cease to deliver catering and hospitality functions for Brighton Dome & Brighton Festival and Royal Pavilion and Museums over the next few months.
The two venues will work together to run joint tenders for event catering and the daytime cafes, but it is expected that the Brighton Dome & Brighton Festival bars will return to in-house management.
Existing event catering commitments will be honoured and café facilities will remain open for business until the tendering process for cafés is complete.
Janita Bagshawe, head of Royal Pavilion, Arts and Museums, and Andrew Comben, chief executive Brighton Dome & Brighton Festival, said: "We are disappointed that Peyton and Byrne will be leaving at this stage, especially as they have invested considerably locally in existing and new outlets over the past 16 months.
"We are pleased to confirm, however, that Brighton Dome & Brighton Festival and the Royal Pavilion will continue working in partnership on a joint tender for event catering and daytime cafés. We look forward to welcoming applications from bidders who appreciate the uniqueness of Brighton & Hove, and can cater for what our visitors and audiences really want, helping us to make the Royal Pavilion Estate a world-class destination for residents and visitors."
Consultation is set to begin with elected staff representatives and unions in relation to how Peyton and Byrne staff can best be protected, the restaurant group added.