Attempts to agree a compromise between whaling nations and their opponents at the International Whaling Commission's (IWC) annual meeting have failed.
After two days of private discussions, delegates reported they had been unable to reach agreement on major issues.
The deal would have put whaling by Iceland, Japan and Norway under international oversight for 10 years.
Talks on the "peace process" have been going on for two years, and a further year's "cooling-off period" is likely.
"After two years of talks... it appears our process is at an impasse," said the US commissioner Monica Medina.
The US has been one of the nations pushing the compromise process forward, and Ms Medina said the breakdown was the fault of no particular party.
However, other delegates - albeit in moderate terms - sought to pin the blame for the breakdown on their opponents.
Argentina's representative Susana Ruiz Cerutti said the draft proposal which has been in front of governments for two months did not meet the needs of Latin American countries.
"It legitimises scientific whaling in the Southern Ocean (by Japan), and does not substantially reduce catches," she said.
The gulf between this vision and that of the whaling nations was exemplified by Japan's junior agriculture and fisheries minister Yasue Funayama, who described the aim of the talks as "restoring the IWC's function as a resource management organisation".
Anti-whaling nations overwhelmingly want the body to transform into a whale conservation organisation.
The proposal, she said, "contained elements that are extremely difficult for Japan to accept".
Behind the scenes, Japanese sources said the key stumbling block for them was the demand from the EU and the Buenos Aires group of Latin American countries that its Antarctic whaling programme must end within a set time-frame.
For Japan, agreeing to reduce its quota from 935 now to 200 in 10 years time represented a significant step forward, which they thought ought to have been acceptable to their opponents, with further discussions - possibly on a phase-out - taking place subsequently.
Sir Geoffrey Palmer, New Zealand's former prime minister and current whaling commissioner, who has been intimately involved in the "peace talks", said that "Japan did show real flexibility and a real willingness to compromise".
"But we are in the situation now where the gaps cannot at this time be bridged; and the reason for this I think is obvious enough - there is an absence of a political will to bridge those gaps, an absence of political will to compromise."
The path forwards now is unclear. Many delegates are asking whether there is any point in leaving the issue open for a further year; if agreement is impossible, they suggest it would be better to face up to the fact now.
Opting for more time would "raise the question of the commission's credibility," said Remi Parmentier, senior policy adviser to the Pew Environment Group, which has been one of the organisations backing the exploration of compromise.
But there may also be a reluctance to leave the more constructive tone of the previous two years behind, and risk a return to the acrimony that formerly characterised the IWC.
However, other anti-whaling groups were pleased that their governments did not accept the draft agreement, as in their view it would have legitimised the whaling programmes of Iceland, Japan and Norway.
"Had this deal lived, it would have lived in infamy," said Patrick Ramage, head of the International Fund for Animal Welfare's (IFAW) whales programme.
"There may be a cooling-off period in the IWC, but meanwhile the whalers will be in hot pursuit of their prey."