As revealed in Media Week (16 January) Sky planned to pull its channels as part of a major toughening of its negotiation stance against its cable rival.
The move follows a carriage deal on Sky's platform which has slashed the amount of subscription money Sky pays to Virgin for channels such as Living and Bravo.
A Sky spokesman said this morning: "We know that Sky's basic channels have many loyal cable viewers and our aim has been to avoid any disruption to their enjoyment of our programmes. We're disappointed that we will now be denied access to cable TV homes.
"We've made repeated efforts to reach an agreement but Virgin Media has rejected all of our proposals, including our latest offer of 3p per customer per day."
Sky claimed it was still ready to return to the negotiating table.
Virgin Media chief executive Steve Burch said he was "disappointed but not surprised " by the outcome, adding: "Nothing Sky have said or done in the course of negotiation indicates they had the slightest interest in doing a commercially viable deal."
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