The London Stock Exchange has been forced to cancel an ambitious project to become the first large international stock market to offer exchange-traded contracts for difference, because its users were unable to allocate the resources to link up to the service.

The UK exchange announced the ground-breaking plan, to develop a service that enables CFDs on FTSE 100 names to be traded alongside the stocks they are based on, a year ago. CFDs are derivatives that allow retail investors to hedge their exposure to shares, although they have been controversially used by certain investors to quietly build stakes in companies in takeover attempts.