Insurance giants Axa are to scrap their agreement covering FIFA for next year's World Cup in Japan and South Korea as a result of the September 11 terrorist attacks and subsequent bombing of Afghanistan.
The entire package was worth £617million in cover but Axa, fearful of the current uncertain international situation, have given notice to football's world governing body that they want to terminate the current agreement and renegotiate.
A statement from FIFA confirmed Axa's move, which has left president Sepp Blatter seething. FIFA have already paid more than half of the £12million being charged in insurance premiums.
The statement read: "As a result of the current uncertain international climate, insurance company Axa have given notice to terminate its insurance cover for the 2002 FIFA World Cup ... while also announcing that it will cooperate with FIFA to find a joint solution by the end of the month-long term of notice.
"While acknowledging this situation, FIFA has emphasised that it has in no way reneged on any contractual obligations and all payments of insurance premiums due thus far (£7.2million out of a total of £12.07million) have been effected on time.
"The world football governing body together with its insurance partners will now search for alternatives, while at the same time investigating the legal implications of this situation."
FIFA insisted next year's tournament was in no danger, and pointed out that less than two weeks ago Axa had stated there were no problems with the cover.
The statement added: "As recently as 2 October 2001 Axa had reaffirmed the validity of the insurance cover, in which the entire cancellation insurance package amounts to approximately 1.4 billion Swiss francs (£617million).
"The staging of the 2002 FIFA World Cup in Korea and Japan is in no way endangered by this development."
Axa are a French-based multi-national insurance firm and sponsor the FA Cup. The FIFA deal was negotiated through their organisation in Germany.