RWE Npower and its partner E.On have said they will not develop new nuclear power projects in the UK.
The two were planning to invest in new plants in Anglesey and Oldbury, near Bristol, under a joint venture called Horizon Nuclear Power.
But the firms say that raising finance for power projects has become difficult due to the global financial crisis.
RWE has also been hit by costs associated with decommissioning nuclear power plants in Germany.
The two German firms formed Horizon Nuclear Power in 2009.
It was working on plans for new nuclear power stations at Wylfa on the Isle of Anglesey and at Oldbury-on-Severn in South Gloucestershire.
RWE and E.On want to find a new owner for the project.
Volker Beckers, chief executive of RWE Npower, said: "We continue to believe that nuclear power has an important role to play in the UK's future energy mix.
"We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors."
Energy Minister Charles Hendry said: "E.On and RWE's withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK's energy future.
"The UK's new nuclear programme is far more than one consortia and there remains considerable interest.
"Plans from EDF/Centrica and Nugen are on track and Horizon's sites offer new players an excellent ready-made opportunity to enter the market," he said.