Brussels has blocked British cities from competing to be the European capital of culture - leaving councils preparing bids potentially millions of pounds out of pocket.
The move has sparked fury in the UK where five councils have spent 12 months painstakingly preparing their bids.
The European Commission said Brexit means UK cities cannot bid for the coveted title - even though other countries outside the bloc have been allowed to.
British politicians tore into the EU over the decisions branding it "bitter" and hugely "disrespectful" to the cities who could have been told after the referendum 18 months ago.
Leeds Council has already spent £500,000 ($966,000) preparing its bid.
Also bidding were Dundee, Nottingham, Milton Keynes, and Belfast, Londonderry and Strabane were putting together a joint proposal - meaning councils could have wasted millions of pounds.
Iain Stewart, Tory MP for Milton Keynes South, said it "seems a very bitter decision" adding: "We are not turning our backs on Europe yet this looks like they are turning their backs on us."
A Downing Street spokesman said: "We disagree with the European Commission decision and we are particularly disappointed that we have been informed of this decision after the bids.
"We remains in urgent discussions with the commission.
"While we are leaving the EU we are not leaving Europe and this has been welcomed by European leaders."
They had started putting together their bids last December but the commission has only just announced its decision.
Scottish First Minister Nicola Sturgeon said: "I'm absolutely dismayed by the news.
"It is now deeply concerning that the amount of time, effort and expense that Dundee have put into scoping out their bid could be wasted."
John Procter, culture spokesman for the Tories in the European Parliament, said: "Tens of thousands of pounds have been spent and organisations have come together in cities like Leeds to prepare very strong bids.
"For all that to be trashed at this late stage is an absolute disgrace.
"We are still members of the EU and are in the process of negotiating a new relationship.
"It beggars belief that the vommission has chosen this moment to announce we are not eligible to take part in an initiative that is all about fostering cultural links and bringing people together.
The Yorkshire and the Humber MEP added: "This is not the final word. I will be asking searching questions about exactly what is going on."
The Department for Culture Media and Sport said: "We disagree with the European Commission's stance and are deeply disappointed that it has waited until after UK cities have submitted their final bids before communicating this new position to us.
"The Prime Minister has been clear that while we are leaving the EU, we are not leaving Europe and this has been welcomed by EU leaders.
"We want to continue working with our friends in Europe to promote the long-term economic development of our continent, which may include participating in cultural programmes.
"We remain committed to working with the five UK cities that have submitted bids to help them realise their cultural ambitions and we are in urgent discussions with the commission on the matter."
Tom Watson, Labour's Shadow Secretary of State for Digital, Culture, Media and Sport, hit out at the move to "shun" Britain.
He said: "The news that the UK has been shunned from this European cultural competition is a great shame for the whole country and particularly for the cities that had put in bids to be the European Capital of Culture in 2023.
"Some cities have already spent up to £500,000 on their bid submissions.
"Being the Capital of Culture had a transformative effect in Glasgow and Liverpool, fuelling regeneration, tourism and community pride. That opportunity has now been taken away from the bidding cities."
Councils contacted by the Mail Online said they were speaking to the Government to try to get clarity on the shock decision.
The last British city made European capital of culture was Liverpool, which was awarded the title in 2008.
The accolade rotates around European countries and it was Britain's turn to be given it again in 2023.
Although Brussels says Brexit means Britain cannot have the title, other non-EU cities have been given it, including Reykjavík in Iceland.
A spokeswoman for the Dundee 2023 bid said: "We are hugely disappointed at this decision that has come just days before the Dundee bid team was due to travel to London to make its pitch.
"The timing is disrespectful not only to the citizens of Dundee, but to people from all five bidding cities who have devoted so much time, effort and energy so far in this competition.
"It's a sad irony that one of the key drivers of our bid was a desire to further enhance our cultural links with Europe."
She added: "While the dust is still to settle on what is a bombshell for all of us, the spirit of the bid remains very much alive and kicking."