The Australian state of Victoria pulled out of hosting the 2026 Commonwealth Games on Tuesday citing major cost blow-outs, leaving organisers “hugely disappointed” as they scrambled to keep the multi-sport event afloat.

State Premier Daniel Andrews said the initial estimate of Aus$2 billion (US$1.36 billion) needed to hold the Games would more likely be around Aus$7 billion, which he called “well and truly too much”.

“I’ve made a lot of difficult calls, a lot of very difficult decisions in this job. This is not one of them. Frankly, $7 billion for a sporting event, we are not doing that,” he said at a news conference in Melbourne.

“I will not take money out of hospitals and schools to host an event that is three times the cost estimated and budgeted for last year.

“The Games will not proceed in Victoria in 2026. We have informed Commonwealth Games authorities of our decision to seek to terminate the contract,” he said.

The event — featuring 20 sports and 26 disciplines — was due to be held across five regional hubs, including Geelong, Ballarat, Bendigo, Gippsland and Shepparton, with each having its own athletes’ village.

Andrews said his team had looked at cutting the number of hubs or even moving the Games to the Victoria state capital Melbourne but “none of those options stack up”.

Instead, he announced a Aus$2 billion support package for regional Victoria.

Andrews refused to say how much it was costing to terminate the agreement but insisted talks with the Commonwealth Games Federation were amicable.

However, the London-based Federation was not happy, blasting the move as “hugely disappointing”.

“We are disappointed that we were only given eight hours’ notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the government,” it said in a statement.

Victoria was only awarded the contract 14 months ago as the exclusive bidder, with the Federation claiming the state had since decided to include more sports, added an additional regional hub, and changed plans for venues.

These additional costs were “often against the advice of the Commonwealth Games Federation and Commonwealth Games Australia”, it said, adding that it had received assurances that “sufficient funding was available to deliver the Victoria 2026 Commonwealth Games”.

Commonwealth Games Australia president Ben Houston was equally scathing, claiming the new cost estimates were a “gross exaggeration”.

“Beyond disappointing for us,” he told reporters. “It’s a comprehensive let-down for the athletes, the excited host communities.”

The decision to pull the pin leaves the fate of the Games up in the air, with fewer countries showing interest in recent times to take on a spectacle seen as losing its relevance.

The Federation insisted it remained “committed to finding a solution for the Games in 2026 that is in the best interest of our athletes and the wider Commonwealth Sport Movement”.

The event typically attracts more than 4,000 athletes from the 54 nations of the Commonwealth, almost all of which are former territories of the British Empire.

The last Games, in 2022, were held in England after Birmingham stepped in late in the piece.

The Victorian state opposition called Andrews’ decision a “massive humiliation” and “hugely damaging to Victoria’s reputation”, suggesting it would hurt the state’s chances of being awarded big-ticket sporting events in the future.

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