Work on the ambitious Panama Canal expansion project has been halted after talks broke down on how to settle a dispute over £981 million in cost overruns.
Panama Canal Authority Administrator Jorge Quijano said the stoppage will give authorities time to analyse how to proceed on the project to widen the canal.
“I don’t even want to suggest that the next steps will be easy or risk-free,” said Mr Quijano. “What I do want to make clear is that we will not yield to blackmail.”
The Panama Canal Authority and the Spanish-led construction consortium leading the expansion blame each other for the overruns.
They were negotiating how to pay for the unplanned extra costs when talks broke down, Mr Quijano said.
An agreement “is now no longer possible and the window is closing minute by minute”, he said, adding that the consortium had ordered employees to stop work.
Spanish firm Sacyr says 10,000 jobs are at risk. Italy’s Impreglio construction firm is also in the consortium.
In Europe, the EU’s Industry Commissioner Antonio Tajani said news of the work stoppage was “unexpected”.
The European members of the consortium had asked Mr Tajani, an Italian, to intervene.
Mr Tajani said: “The interruption of the work would be bad news for employment, for the worldwide economy, for the expansion of the canal and for the parties themselves.”
The project, now three-quarters complete, would double the capacity of the 50-mile canal, which carries 6% of world commerce.