Both sides have been in discussions since May with the second of two opening bids of £650m rejected by Crest Nicholson in May.

Last month, Crest Nicholson directors said they are “minded to recommend” an improved acquisition bid which valued the smaller housebuilder at £720m.

The latest all-share offer would have seen Crest Nicholson’s shareholders hold an 18% stake in the enlarged group.

However, in a brief stock exchange announcement yesterday, Bellway revealed that “it does not intend to make a firm offer for Crest Nicholson”.

The announcement added: “As noted in its trading update released on 9 August 2024, Bellway remains confident that its robust balance sheet and operational strength, combined with the depth and quality of its land bank, will enable Bellway to deliver volume growth in the years ahead and support ongoing value creation for shareholders.”

Crest Nicholson said: “The Board of Crest Nicholson had engaged with Bellway in relation to a possible all-share offer for Crest Nicholson in response to a series of unsolicited proposals from Bellway.

“As outlined in its half year results on 13 June 2024 for the period ended 30 April 2024, Crest Nicholson remains confident in its standalone prospects, in particular given conclusion of the review of provisions for completed development sites supported by external consultants, its highly attractive land portfolio and the new leadership of Martyn Clark.”

Shares in Crest Nicholson closed down more than 20%, while Bellway stock rose 4%.