Belfast has failed in its attempt to be named European Capital of Culture for 2008. Despite spending £1 million of public money on its campaign, the city failed to even make the short-list.
The group that co-ordinated the city's bid, Imagine Belfast, expressed its disappointment. Belfast had been regarded as a front-runner of the 12 entrants.
However, critics had previously said the idea of the city as a European Capital of Culture was dubious given the lack of a vibrant arts scene.
Continuing street violence along the peace-line, dissident republican bomb attacks and scares, and the suspension of the North's Assembly and Executive are said to have further damaged the bid.
Six cities were short-listed for the final stages of the competition - Birmingham, Bristol, Cardiff, Liverpool, Newcastle/Gateshead and Oxford. The winner will be named next spring by the British Prime Minister, Mr Blair.
The city's omission was announced at a reception yesterday at the offices of Imagine Belfast.
"It is crucial we do not lose sight of the huge positive outcomes of this bidding process," said Mr Alex Maskey, Belfast's Sinn Féin Lord Mayor.
Northern Ireland Office Minister, Ms Angela Smith, said: "The challenge is to harness the tremendous work we have already produced and continue to promote Belfast as an international cultural venue to the benefit of everyone in the province."
The chairman of Imagine Belfast, Mr Tom Collins, said: "Obviously we are disappointed, it is a knock for us. I am not in the mind of the judging panel.
"But, in our view, we were confident that we had done more than enough to get through to the short-list and we felt we had one of the strongest bids."
Belfast may have suffered because it does not boast as many large buildings as other cities in the running. "It doesn't go for the grand spectacle," Mr Collins said.
SDLP Assembly member, Ms Carmel Hanna, expressed regret at Belfast's failure to make the short-list: "This is a great disappointment for Belfast. The exercise in putting together the bid has not been wasted.
"It was an opportunity for us all to look for our cultural strengths and potential to develop as a city, and to perhaps begin to see ourselves as others do."