The news comes after it was revealed that FFA will have to step in to assist financially struggling club Brisbane Roar and were concerned that three western Sydney bids had not raised enough financial backing.
"We were not going to put in a side for the sake of it," an insider told The Australian yesterday
"Quite simply, none of the Sydney groups were able to convince us they had the right financial backing. We continually asked them to show us the money, but they couldn't.
"Given the current climate, we had a responsibility to ensure the new club was financially well placed. We didn't want to put in a new club then see it fold after a season or two.
"We haven't given up hope of another team from Sydney," the insider added. "They will have another 12 months to get their act together."
It now appears almost certain that the A-League will go ahead with an 11-team competition in 2010/2011 when a second Melbourne franchise enters.