Moreau Kusunoki’s landmark Guggenheim museum in Helsinki, Finland, is in danger of not coming to fruition with the co-ruling nationalist Finns party blocking state aid for the project’s development.

The Paris-based architecture firm were announced as winners of the Guggenheim Helsinki competition in June last year but the political row between the Finns party, the Centre Party and the National Coalition Party – the three groups forming a coalition government – is threatening to derail the €140m (US$157.6m, £117.8m) project.

The open competition – which attracted 1,715 entries – was controversial, with a group of Helsinki artists setting up a competition for alternative ideas for transforming the harbourside site in protest at the city's plans to build a Guggenheim museum there, and the Finn party calling the development a “waste of taxpayer’s money”.

During budget talks last week, the Finns objected to the €40m (US$45m, £33.7m) support costs offered by the government, especially during a time when Finland’s economy is struggling while the government pushes through a multi-billion Euro austerity measure to try and curb public debt growth.

“The Centre Party and the National Coalition Party go back to the idea of state-funding the Guggenheim, despite the fact that we have agreed otherwise a number of times,” said Timo Soini, chair of the Finns party, speaking in his personal blog.

“There will be no money for the project. It will not even be discussed in the budget session,” he said, adding that the party is “not opposed” to building the museum with private funds, but will not approve of allocating state funding for the project as long as it remains a part of the ruling coalition.

The Guggenheim Foundation released a statement following the ruling, stating that it would continue talks with the government and the city of Helsinki to find alternatives for the funding.