A Transport for London spokesman said the market had "changed dramatically" since London Underground started the tender process. "Overall revenues from this tender are modest, possibly reflecting the current market conditions, and in light of the costs and operational issues London Underground would face, it has decided to exercise its right not to award contracts and has decided to discontinue the tender process," he said.
Livingstone previously indicated that he was seeking an annual sum of £10m for both the morning and afternoon contracts. The morning contract for the distribution of Associated Newspapers' Metro is believed to be worth £4.6m.
TfL then invited expressions of interest in distributing a free afternoon paper and Associated and News International were believed to be among potential bidders.
However, last autumn both firms launched afternoon freesheets using hand vendors to distribute copies to commuters outside Tube stations.
News International withdrew its bid, while Associated bid low, based on the comparative cost of hand distribution. Meanwhile, in a separate tender, News International won the contract to distribute thelondonpaper in 10 mainline Network Rail stations that its general manager Ian Clark said offered a more upmarket audience and more efficient distribution within Zone 1.
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