Victoria Premier Daniel Andrews on Tuesday said his government last year agreed to host the next edition of the quadrennial event "but not at any cost".

He said they had initially budgeted 2.6 billion Australian dollars (£1.4 billion) to stage the Games in five regional cities, but recent estimates put the potential cost as high as 7 billion Australian dollars (£3.7 billion).

Andrews told a news conference he'd notified Commonwealth Games organisers of his government's decision to pull out of the hosting contract.

"Today is not about finding fault with those cost estimates," he said, declining to outline the reasons for the cost discrepancy.

"Frankly, 6-7 billion Australian dollars for a 12-day sporting event, we are not doing that - that does not represent value for money, that is all costs and no benefit."

The Games had been scheduled for 17 -29 March 2026 in the regional centres of Geelong, Bendigo, Ballarat, Gippsland and Shepparton in regional Victoria.

The state government had promoted the multi-city model as a game changer, with the five regional centres hosting 20 sports and nine fully-integrated Para sports.

The government's website had previously promoted Victoria 2026 as a showcase of "what makes the people of our state tick: our unity, our diversity, our sense of community, our welcoming attitude and our love of sport".

The Commonwealth Games Federation (CGF) has responded with disappointment to the news, saying that the figures being quoted by the Victorian government are 50% higher than those which were advised to the organising committee for the games last month.

The CGF said that the state government's decisions to host the game across multiple cities and add more sports to the games has added "considerable expense" to the event.

They added: "We are disappointed that we were only given eight hours' notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the Government.

"Up until this point, the Government had advised that sufficient funding was available to deliver the Victoria 2026 Commonwealth Games.

"We are taking advice on the options available to us and remain committed to finding a solution for the Games in 2026 that is in the best interest of our athletes and the wider Commonwealth Sport Movement."

Birmingham stepped in to host the 2022 Games in England to replace Durban, South Africa.

Victoria state previously hosted the 2006 Commonwealth Games in Melbourne.

The last edition of the Games held in Australia was on the Gold Coast, Queensland state, in 2018.

The Gold Coast is part of the southeast Queensland area that is scheduled to host events during the 2032 Olympics in Brisbane.