The 34-year-old former Turner Prize-winner said that a web of political in-fighting had stalled the project.
Some politicians in Austria did not want a holocaust memorial. Others opposed Ms Whiteread because she is not Jewish. Others said the metaphor of the piece - a concrete cast of a library of books - ignored working- class victims and concentrated only on intellectuals. Others wanted the piece moved away from the proposed site in the old Jewish ghetto of Vienna.
Speaking at the Venice Biennale, Ms Whiteread told The Independent last night: "It is all of these things. I am very angry. I cannot now see it going ahead. It is a bitter disappointment."
Her disclosure threatened to take the gloss off the biggest night of her career as she became the first woman to represent Britain with a solo show at the Biennale.
She said that winning an international competition to design Austria's holocaust memorial had been rendered all but worthless.
She has nearly finished the installation, a concrete cast of a ghostly library representing Hitler's attempted destruction of a people and its culture. It was to be placed in the Judenplatz in Vienna's old Jewish ghetto, and was supposed to open last year, then this year, and then next June.
Ms Whiteread said last night: "No one from Austria has spoken to me for six months. I absolutely refuse to move the piece to another site. It has to be site-specific. You cannot design by consensus."
Her main installation at the Biennale, Ten Tables implying endless bureaucratic meetings, shaped in what one critic termed a "Kafkaesque layout", was a poignant comment on the last two years.
One room of the British Pavilion at the Biennale contains a rubber and polystyrene cast of a bath; in another is a cast from a mortuary slab. The main room contains plaster casts of 10 tables arranged in a rectangle. A separate gallery has a plaster cast of a wall of bookshelves.
Whiteread was the talk of the Biennale last night as the British Council threw a reception in her honour and international gallery directors came to see her work.
Imponderable to some, but conjuring memory and symbolism to others, the Whiteread show also hinted at a deeper controversy affecting her and the world of arts and politics.
Other rooms in the British Pavilion last night demonstrated her hypnotic sense of space, light and the effects of water. In a gallery overlooking one of Venice's canals she placed nine slabs of translucent green resin cast from floorboards, the light reflecting off the canal and giving the work a sense of liquidity.
Whiteread is one of the most controversial and challenging sculptors of her generation, exciting both in admiration and irritation. On the night she won the pounds 20,000 Turner Prize in 1993 she also found herself being presented with a pounds 40,000 award for the "Worse Body Of Work Of The Year" at the gates of the Tate Gallery by the K Foundation, a group of protesters led by some affluent former pop stars. She gave the money to charity.Reuse content