National Park chiefs will be forced to hand back £1.5m after Government ministers rejected part of a plan to make the New Forest more cycle-friendly.
The National Park Authority (NPA) blocked its own proposal to introduce a Boris Bikes-style scheme earlier year amid fears it would attract too many cyclists to the area.
Members approved an alternative plan to spend the money on improvements to existing cycle facilities used by residents as well as visitors.
But elements of the £2m scheme have now been turned down by the Department for Transport (DfT), which supplied the cash on condition it was used for eco-friendly transport initiatives.
Four schemes costing a total of £500,000 have been given the go-ahead, but a £1.5m plan to improve cycle facilities at Rhinefield, near Brockenhurst, and Moors Valley Country Park, near Ringwood, have been thrown out.
The £1.5m will now be spent in other national parks and cities instead.
But the NPA can keep the rest of the £3.6m it was given last year to help fund green transport initiatives in the area.
An NPA spokesman said the Government had approved four of the six proposals put forward following the decision to scrap the cycle hire plan and had also re-iterated its support for a £301,000 family cycling centre in Brockenhurst.
NPA chairman Oliver Crosthwaite-Eyre said: “We're very pleased that four of the six alternative cycling projects have been approved by the DfT and that more than £2m will be spent locally.
“We're obviously disappointed that two of the projects were not given the go-ahead.”
One of the schemes rejected by the DfT was a proposal to upgrade the Rhinefield and Bolderwood Ornamental Drive, near Brockenhurst, which is used by a large number of cyclists.
A plan to improve and develop cycle facilities at Moors Valley Country Park, near Ringwood, was also thrown out.
Transport minister Robert Goodwill said: “Cycling is good for health and for the environment at we have committed £374 million to cycling between 2011 and 2015.
“We hope that the decision announced today will reinvigorate the New Forest programme and help the project encourage cycling.
“We must do all we can to make sure our investment in cycling infrastructure supports schemes that matter to people and make a difference. That is why we have taken the decision to reallocate this money to other schemes.”
One of the schemes given the go-ahead is a £185,000 proposal to create a long-awaited cycleway from Marchwood to Eling.
- This story was amended at 4.37pm after the Department of Transport changed the quote attributed to transport minister Robert Goodwill.
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