Members of the consortium owned a number of sites along the proposed alignment, which would have run from St Stephen's Green to UCD. Stops would include RTE, Lansdowne Road and St Vincent's Hospital.

It is believed that they had planned to build high-rise developments on the sites, which is now impossible after the council's decision.

Transport sources said that the Railway Procurement Agency (RPA), the state agency which builds and operates Luas lines, now expect the consortium to drop their plans.

But it is understood that the consortium has yet to instruct their engineering consultants for the project, Arup, about the future of the plan. One source claimed that the project was not dead due to the value of the sites held by the developers.

It is understood, however, that it was made clear at a meeting between the RPA and Arup that the proposal was linked with the passing of the local area plan.

A spokesman for the RPA confirmed that the organisation was not doing "anything active" with the project.

"We're leaving the matter to the local authority, " he said.