As reported by Sail World, the three party coalition backing the bid in Valencia has broken down, but the city could still host some events as part of the America’s Cup under a separate "all-Spain" application.

The Valencia bid was promoted by leading figures from H2O Riders Science and Management, the Real Club Náutico (RCN) de Valencia and Redstone Advisory Partners.

They had hoped that hosting the America’s Cup would provide an economic boost and revitalise the maritime industry, and claimed to have "solid economic support" from local and national bodies.

However, Valencia has now pulled out of the contest as "the parties could not align their mutual interests," although they will continue to work on a proposed legacy programme running until 2040 to redevelop unused areas and maritime infrastructures.

Niccolò Porzio di Camporotondo, the founder of H2O Riders Science and Management, believed the America’s Cup could have helped to kick-start the long-term regeneration plans.

"The America's Cup would have been the perfect accelerator for the Valencia Maritime Revitalisation Plan that we have been working on and will be introduced before the year-end," he said.

"I would like to thank Grant Dalton [Team New Zealand (TNZ) chief executive], TNZ and America’s Cup Event (ACE) for accepting Valencia's bid, choosing it as a finalist, and for the work we have done together to get this far.

"As Valencia bows out, we wish TNZ, ACE and the 37th America's Cup fair winds and following seas."

Alejandro Fliquete, the President of RCN Valencia, added: "All that work well done - it is very difficult to be a finalist - has been offered to local, regional and state public administrations."

However, it has also been reported by Sail World that the Spanish Government is supporting a project promoted by Francesco do Leo, Hugo Moran and Pablo Beltran to host the America’s Cup across Spain.

This could include America’s Cup match and preliminary events being held across several venues, including Barcelona and Valencia.

Valencia previously hosted the America’s Cup in 2007 and 2010.

The defending champions are the Royal New Zealand Yacht Squadron who beat the Italian challengers Circolo della Vela Sicilia 7-3 in Auckland this February.

The announcement of the host for the America’s Cup’s 37^th edition is expected to be made by the Royal New Zealand Yacht Squadron and TNZ by September 17, with Jeddah in Saudi Arabia and Cork in the Republic of Ireland also likely to be in contention.

The America’s Cup is the oldest international sporting trophy in the world, having first been held in 1851.