The idea, though strongly supported by the EEF at national level, encountered fierce opposition among its 15 regional engineering associations.
But there was also opposition at senior levels of the CBI to the idea of the much smaller EEF having equal clout in a merged body.
The two organisations now appear to have accepted that the best they can hope for is a loose alliance making joint policy representations to the Government on subjects such as the Budget.
The failure of the merger talks will come as a disappointment to Michael Heseltine, President of the Board of Trade, who has been urging trade associations to get together and improve their overall performance or face being denied access to ministers.
The CBI has 250,000 member firms in manufacturing and services employing about 12.5 million people - half the national workforce. The EEF has 5,000 companies employing 800,000.
Apart from the difference in size, the two organisations fulfil markedly different roles, with the CBI's accent on lobbying and policy formulation and the EEF concentrating on providing specific services, such as employment and health and safety advice. The EEF's subscription fees are also much higher.Reuse content