The Foyle MP said: “The Ebringtion site offers huge potential for the redevelopment and the regeneration of our economy.
“After a huge amount of work behind the scenes to find a replacement for the Quiet Man Whiskey Distillery following its withdrawal due to a tax change implemented by the British Government, we had a Scottish developer in partnership with American drinks giant, Luxco, ready to step in and take over the distillery.
“Unfortunately the two sides in the proposed partnership could not agree on the distribution rights for the product in the US and the deal has fallen through.
“This is disappointing, particularly given all of the hard work that had been put in by all sides to try and ensure we would see this project revived.
“There has been real progress happening on Ebrington in recent times with the new hotel about to begin construction and the new office building also at an advanced stage.
“We now need now to ensure, as this building goes back on the market that a new tenant can be found that will deliver a top-class facility in this site.”