The event, one of the biggest in Britain's horse racing calendar, had been due to be staged at York Racecourse over four days.

But having already lost the first two days, clerk of the course William Derby called a noon inspection yesterday to assess the prospects for today and tomorrow.

As the rain continued to pour without the slightest glimmer of the skies clearing, officials were left with no option but to cancel, meaning the racing action will now move down south.

Mr Derby said the track was waterlogged in places and there was no prospect of it drying out.

He added: "It's hugely frustrating and to be beaten by the elements is a very humbling experience. We have had an unbelievable amount of rainfall and the course could just not take any more."

Gillian Cruddas, chief executive of Visit York, the former York Tourism Bureau, said: "It is hugely disappointing for our visitors, the racecourse and the city.

"Rainfall has been at unprecedented levels for August and unfortunately that is out of our control. We are doing our utmost to ensure visitors are offered alternative options for their entertainment in York.

"Naturally it is a blow to the visitor economy figures for August and we will be meeting with our hoteliers' association to see what can be done to minimise the impact of this."

The association said it did not know at this stage how many people had cancelled their hotel bookings because, although the meet had been called off, some people were still staying on. But it was estimated that £5m in tourism spending would be lost.

British Horseracing Authority director of racing Ruth Quinn, said races that could be saved are likely to be split between Newmarket and Newbury tomorrow and Newmarket and Goodwood on Saturday. York insisted there would be a four- day Ebor in 2009 with the new drainage scheme for the track.

n The 102nd Farndale Agricultural Show, due to be held near Kirkbymoorside next Monday, was called off last night because of the ground conditions.