The announcement ends a sale process that began in February this year and the company must now seek an additional financial source to repay some of the debt incurred in its £4.1bn acquisition of US insurance industry service provider Choice Point.

Possible bidders for the division, which will now be run as a separate company within the group, were thought to include US private equity firms Bain Capital and Apollo.

Sir Crispin Davies, Reed Elsevier’s chief executive, said: While the short-term outlook for RBI is challenging given the recent deterioration in economic outlook, we believe the business has significantly more value to our shareholders than could be realised in a transaction at this time.

Reed had initially anticipated proceeds of £1.3bn for RBI. However, this was reported to have fallen to £650m. Even then, a sale agreement could not be reached, despite the offer of financial support for the transaction.

A divestment of the business would have enabled Reed to focus on the information and data services markets in which the publisher is expanding. Earlier this year, United Business Media also announced plans to focus on these markets.

RBI publishes around 30m copies of its 100-plus UK magazines each year, with more than 800,000 subscribers across titles such as New Scientist.

Polestar currently prints 22 of these at Chantry and Colchester in a contract that extends until 2011.