Legal action has ended over what used to be Ryde ice rink, but the Isle of Wight Council leader has pledged to continue the search for an acceptable long-term solution.
The council owns the freehold of what was once Planet Ice, on Ryde seafront.
It has been in arbitration proceedings with leaseholder AEW, to try and get the building back into reasonable repair for use by the community.
On Thursday, it was confirmed at a meeting of the Cabinet that arbitration proceedings had come to end, as no agreement could be reached.
The building - once home to the Isle of Wight Raiders ice hockey team and scores of young ice dancers - has stood empty in recent years and its condition has deteriorated.
At last night's meeting, leader Cllr Dave Stewart reaffirmed his commitment to resolving the future of the arena.
The council had initiated legal action under the terms of the lease to require AEW to use its “best endeavours” to keep the facility open and operational in the longer term.
The legal action required the two parties to use arbitration to resolve the argument as a first step.
Cabinet member for regeneration and business development, Cllr Wayne Whittle, said: "The council has made extensive efforts during the arbitration to resolve areas of difference, and to find agreement which we believe would meet the wishes of the community for this important and sensitive seafront location currently standing dark at a key gateway to the Island.
"However, this disappointingly has not been achieved – and to avoid the potential for further expense to the council in chasing a position we are advised has little hope of positive resolution, we have stepped away to review the position.
"Our commitment on behalf of the local and Island community remains steadfast."
The council has indicated it is not willing to accept an alternative proposal put forward by AEW of replacing the arena with retail use in such a key and sensitive seafront location.
It is also unwilling to make any of its surrounding land available on a temporary or permanent basis unless a proposal comes forward that has the support of the community.
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