The thrice-postponed ninth South Asian Federation Games were cancelled on Thursday after Pakistan expressed its inability to host the regional multi-event competition.
The executive council meeting of the South Asian Sports Federation (SASF), at Rawalpindi, accepted Pakistan's decision.
The 10th edition of the Games will be hosted by Colombo in 2005.
"We do not know when the political situation is going to improve internationally. That is the reason why Pakistan suggested the cancellation of the ninth SAF Games which has been accepted by SASF," Pakistan Olympic Association (POA) president Wajid Ali Shah told reporters after the meeting.
The SAF Games organising committee chairman Arif Hasan said Pakistan is deeply disappointed with the turn of events.
"The cancellation will result in loss amounting between Rs 62 and 70 million," he said.
The SASF meeting, which was called to decide on the future of the jinxed Games, originally scheduled to be held in 2001, was attended by representatives of only two of the seven-member SAARC countries besides Pakistan -- Nepal and Sri Lanka.
India, who pulled out of the Games, citing security concerns, did not attend the meeting. Also absent were representatives of Bhutan, Maldives and Bangladesh.
Indian Olympic Association president Suresh Kalmadi had already informed the SASF that he would not be able to attend the meeting as its "timing was not appropriate".
Media manager of the SAF Games Committee Major Yahya said the decision to hand over its chance to host the Games was taken by the POA after it received necessary instructions from the government.
Asked whether India's pull-out had a bearing on the decision, Hasan replied in the negative. In fact, Hasan praised his Indian counterpart, Kalmadi, for "taking the initiative to prevail on the Indian government to take part in the Islamabad Games".