The country's Prime Minister John Key confirmed that the Cabinet has did not think backing the bid with taxpayer money represented good value for money.

Key claimed an economic analysis had shown running the event, which Auckland had hosted in 1990, would result in a loss of $600 million (£277 million) for the taxpayer.

He said: "The issue is what it costs to run the event. It's very, very expensive and we can't see the economic payback.

"The Government had considered the value from tourism spin-offs and a rise in the country's profile but decided the losses outweighed the gains.

"The economic loss was so great that we just couldn't justify it."

Key claimed the Government's support of the Rugby World Cup, which is due to be held in New Zealand next year, was different.

He said: "The Rugby World Cup has a big cost in terms of investing in stadiums but not in terms of the actual running of the event.

"The Commonwealth Games it was largely an operating loss for running the event."

With the deadline for submitting bids to the Commonwealth Games Federation (CGF) due on March 31, it leaves the Nigerian capital Abuja and the Gold Coast in Australia as the only cities who have so far said that they plan to definitely bid.

New Zealand Olympic Committee Secretary General, Barry Maister claimed that they still hoped to launch a bid for the Commonwealth Games sometime in the future.

He said: "We may not be hosting the 2018 event, but our door is still very much open for future Commonwealth Games bids.

"The feasibility study has shown we have the capability and capacity to win and host the Games."

Michael Barnett, a member of the Bid Feasibility Group, claimed that there would have been long-term benefits from Auckland bidding but admitted that the current economic climate made it difficult for the Government to back.

He said: "The bid feasibility process is an investment in Auckland’s future because our thorough and sophisticated approach for assessing a possible Commonwealth Games bid has identified a wide range of opportunities for Auckland.”

These included possible village sites that can be targeted for urban renewal, venues that can be enhanced to support other sporting events, and opportunities to build a cluster of high performance sports, research and medical facilities. 

All can be pursued with or without a bid for the Commonwealth Games, Barnett claimed.

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