Andrew Franklin, the publisher who chairs the JCC board, said: "What is so extraordinary is the economy is deteriorating so fast in banking, property, finance, hedge funds - areas where many of the most generous of likely donors are involved."
Meanwhile, he noted, building costs have risen by 15-20 per cent, with the price of steel and cement having doubled in a year. The 2012 London Olympics has also sparked a rise in labour costs, with engineers and surveyors being "sucked into" the massive effort to get the capital ready for the games.
The JCC's rethink was, he said, "a difficult and painful decision, but it would have imprudent not to take it. But the vision remains."
No figures have been released for the cost of the building beyond a vague "tens of millions", but it would have required the community's biggest ever fundraising campaign for a capital project.
The new JCoSS school, due to open in two years, is due to cost £46 million, £36 million of which is likely to come from the government.
The JCC, however, faces the prospect of raising all its money from private sources - and even if a building does get off the ground, it has forecast that it will have to meet 20 to 30 per cent of its annual running costs from fundraising.
According to Allan Morgenthau, vice-president of the - some might say rival - London Jewish Cultural Centre, there is another reason why such a large-scale cultural project would find it difficult to attract enough money. "A lot of donors feel that money is required for social services, which are under enormous pressure," he said.
Even a JCC board comprising top fundraisers such as Sir Trevor Chinn, Lloyd Dorfman and Jennifer Moses felt no option but to rethink their grand ambitions.