Improvements to junction 8 of the M27 and the neighbouring Windhover roundabout have been scrapped, according to an MP.
Plans have long been in the pipeline to improve the two roundabouts at an approximate cost of £50m.
It would have involved adding extra lanes and improving signalling, with National Highways citing serious crashes, poor air quality and congestion connected to the route being used as a rat run to avoid M27 delays.
But after the Secretary of State blocked part of the plan last summer, National Highways had gone back to the drawing board.
Tory politician Paul Holmes, who represents Hamble Valley, shared a letter from the Department for Transport to his social media followers, which detailed the decision.
The letter said that redesigning the scheme would represent 'low to poor value for money'.
"I recognise that this news may come as a disappointment to you. I want to assure you that we are determined to build the transport infrastructure to drive economic growth and opportunity in every part of the country, and to deliver value for money for taxpayers."
Reacting to the news, Mr Holmes said: "The planned changes would have reduced congestion improved safety and lessened the environmental impact of transport travelling along this route.
"These £50 million in cuts will only make congestion worse in an area with worsening bottlenecks from overdevelopment and when we face the threat of a gravel quarry in Hamble.
"I will be holding the Government to account on this decision as I believe it is a grave mistake."
The decision was made as part of the first Labour budget in 14 years.
It saw Chancellor Rachel Reeves - the first woman to deliver a budget - announce plans to raise taxes by £40bn; up the national minimum wage; hike national insurance contributions for employers; freeze inheritance tax thresholds and fuel duty; take a penny off pints in pubs and tax tobacco above inflation.
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