The two firms issued a joint statement yesterday, but it is clear that the initiative came from Andersen.
The firm, which has been making serious inroads into the legal field through setting up an associate firm under the name Garretts and acquiring the Scottish practice Dundas & Wilson, claimed that the defection of two Wilde Sapte partners to rival firm Allen & Overy meant the deal was not what it appeared when merger talks were announced in March.
However, Stephen Blundell, Wilde Sapte's marketing partner, said the departure of those partners was not as significant as that of their former team leader, Graham Smith, who announced he was moving to Allen & Overy before the talks began.
He added that other concerns about the proposed merger with an organisation that employs more than 100,000 people around the world - notably from the Paris office and from practice areas with significant potential conflicts - had been there since the talks began.
Nick Prentice, Andersen's European managing partner for tax and legal services, explained the decision by saying that he and his colleagues had been attracted to Wilde Sapte's "excellent reputation in banking and finance and their international strength". However, he added: "Our objective to form a merged firm of the highest quality by allying these strengths to those of our own legal network depended on the original elements of the transaction being preserved intact. We regret that our discussions will not now proceed as intended."
Had the deal gone ahead, Wilde Sapte, a respected City firm with more than 70 partners and 600 staff, would have helped Andersen into the top five in terms of worldwide coverage, with 1,400 lawyers operating in about 30 countries.
Andersen already has the largest law firm in Spain and a significant presence in other mainland European countries.