White Horse Fast Ferries, which won the licence to run ferry commuters along the river, needed pounds 1.5m from shareholders - but only managed pounds 500,000 by the time the deadline expired yesterday.
The service would have seen a fast ferry run between Greenwich and the Millennium Dome as well as boats stopping close to some of the best-known restaurants in London, such as at the Savoy and the Oxo Tower on the South Bank. The plan also would have meant that commuters could use Underground and bus tickets on the ferry.
"I blame the City institutions," said Peter Lay, chief executive of White Horse Fast Ferries. "Everyone wanted this scheme to work, including many corporate investors who were busy promoting the Thames. But not one of them put their money where their mouth was."
The service was due to start next June, but the collapse of the venture means that river bus operations are sure to be delayed. White Horse had specially designed and built two "tri-marans" for the service and had plans for another three to be in service by 2000.
"What I will do is close down our shipyard and just build offices over it," said Mr Lay. "It will mean the loss of two dozen highly skilled jobs."
The failure will be an embarrassment for John Prescott, the Deputy Prime Minister with responsibility for transport, who has been championing the river as an alternative means of crossing the capital.
Mr Prescott has already proposed eight new piers, to add to the existing 14, on the river in anticipation of the new ferry service.
London River Services (LRS), the division of London Transport which has responsibility for the scheme, said that the river buses could be using the Thames before 2000. In a statement released yesterday, the river authority said: "London River Services and White Horse Ferries will meet as soon as possible to discuss the way forward and will be working hard to develop a plan so that a central London hopper service ... will go ahead."
LRS said it would also be talking to other prospective operators to rescue the river bus service.
The last ferry service on the river for commuters ran between Chelsea Harbour and Canary Wharf. It collapsed after the owners of Canary Wharf, Olympia & York, went bankrupt in the late Eighties.
"That was almost making money and that was when only 10 per cent of Canary Wharf was occupied - now it is virtually full," said one expert.Reuse content