Supporters of the proposed Kingskerswell bypass have yet to convince the government of the wisdom of investing the £130million the road is expected to cost.
Transport secretary Philip Hammond this week failed to include the scheme in the current spending round.
He told parliament: 'Our duty is to ensure that every pound spent is essential,' and said only those projects that could generate £6 for every £1 invested would be approved.
Mr Hammond went on to say that the last appraisal for the bypass was in 2007 and that more up-to-date information was needed.
He had earlier told the house: 'A lot has changed in the contracting world since 2007.'
The news has disappointed Newton Abbot MP Anne Marie Morris. She said: 'We've worked hard together to ensure this long awaited scheme finally sees the light of day.
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