A change in management at Sauber prompted the plug to be pulled on a proposed deal with the Japanese engine manufacturer from 2018.
The Swiss team quickly renewed their partnership with Ferrari instead, forcing Honda to look elsewhere on the grid.
Red Bull’s junior team entered the equation, even though they are signed up for another year with current supplier Renault.
But, after several weeks of discussions, the two parties have failed to reach an agreement over finances.
McLaren are still yet to make a decision on whether to stay with Honda after a plethora of engine and reliability issues have left them languishing near the bottom of the constructors’ standings.