Canadian government officials have conceded defeat in their efforts to have the Grand Prix reinstated in 2009.

Senior figures in Montreal, the host city since 1978, had hoped to earn a reprieve after the race was left off next year`s schedule owing to an alleged dispute with F1 rights owner Bernie Ecclestone over past payments.

"We were constantly guided in our negotiations by principles of responsible management," Montreal mayor Gerald Tremblay said in a statement. "However, despite our endeavours and those of the business community, the unreasonable demands of Formula One exceeded the taxpayer's ability to pay."

Canada's minister of tourism, Raymond Bachand, added: "Whenever the Grand Prix of Canada needed help from the Government of Quebec, we were there.

"We worked very hard over the past few weeks to ensure there would be a grand prix in Montreal, while staying fiscally responsible.

"We cannot meet Mr Ecclestone's unworkable demands.

"Unless he eases his requirements and adopts a different approach, there will be no grand prix in Montreal in 2009."

According to Bachand, Ecclestone has demanded a bank or government guarantee of close to £21million to stage the 2009 race, with that figure rising to £25.5million by 2013.

The cost of staging the race over the next five years would total £117million.