A plan to improve facilities at Land's End airport have ground to a halt over spiralling costs.
The Council of the Isles of Scilly and the Isles of Scilly Steamship Company had joined forces in an improvement project at Land's End and St Mary's.
The first stage due to take place next month was the hard surfacing of the grass runways at Land's End, where waterlogging kept the airport shut for months on end last winter.
However, the Isles of Scilly Council said that rising costs, which were not covered by steamship company or European Regional Development funding, have forced them to call a stop.
Diana Mompoloki, from the Isles of Scilly Council, said: "This delay is deeply frustrating. However, this is just a temporary setback. Unfortunately, it has been impossible to conclude the contracting arrangements due to an unforeseen increase in costs, which is not covered by the financial resources available from ERDF and the IOSSCo.
"We have therefore had to take the difficult but logical financial decision to call a temporary halt to this element of the project whilst we re-assess the scope of the works, the works will not now go ahead in November, but we shall re-issue the tender as soon as possible to ensure the work can go ahead as early as possible."
Jeff Marston, chief executive of the Isles of Scilly Steamship Group, said flights would operate as normal.
"Clearly the island community and our passengers will be disappointed by today's announcement given that we had hoped the runway works would be completed in time for Christmas.
"With work now delayed to next year, Land's End Airport and our Skybus services will operate as normal throughout the winter, and our Scillonian III passenger ship will sail as planned during November.
"Since last year's exceptionally wet weather we have carried out interim works at Land's End Airport to improve the runway condition, including additional drainage, but longer term we need to harden the runways to ensure that we can reduce disruption to passengers during periods of extreme weather."
The company had intended to close Land's End Airport for three weeks in November to allow the runway works to take place, and operate instead from Newquay.
Flights will now operate as normal and passengers are being notified.