(Updates with Alonso quotes)
BARCELONA, Sept 23 (Reuters) - Formula One driver Fernando Alonso's plans to buy Spanish cycling team Euskaltel-Euskadi have collapsed, sponsors Euskaltel said in a statement on Monday.
"We could not reach a definitive agreement. Euskaltel is now obliged, regrettably, to return to the process of an orderly and responsible closure of the project," they added.
"For Euskaltel and the team this is sad news after the hope generated by the initial agreement reached at the end of August and public declarations at that time by Alonso and his representatives."
Ferrari driver Alonso, a keen bike rider, had been set to purchase the company that owns the Basque team's WorldTour licence to enable them to continue racing in professional cycling's top league in 2014.
In a statement released on his Twitter account, Alonso also expressed regret about the deal's collapse.
"We've tried it until the end but it's just been impossible to have a cycling team in 2014," he said.
"My passion for the sport remains intact so this is only the beginning of the future. From tomorrow morning we are going to work on building, if needs be from scratch, a team we can be proud of."
Led by Spain's Samuel Sanchez, the 2008 Olympic road-race champion, they face closure at the end of the season after 17 years of activity.
No financial details were given of Alonso's offer but Spanish media had reported that the double world champion had some six million euros ($8.11 million) available to spend on the project. ($1 = 0.7402 euros) (Reporting by Braden Phillips, Editing by Alan Baldwin and John Mehaffey)