The board of the Olympic Park Legacy Company (OPLC) ended negotiations with the club on Tuesday, instead agreeing to bring the stadium into public ownership.
The break down of the deal is being linked to concerns over delays caused by a legal dispute with Tottenham, while West Ham have claimed the collapse was due to an "anonymous complaint" to the European Commission.
However, it is believed that West Ham is still hopeful of being awarded tenancy of the stadium while their council, Newham, will be given the 'Olympic legacy' aspect of the grounds to deliver athletics and sports events in the future.
In a joint statement, Karren Brady, Vice-Chairman of West Ham United, and Kim Bromley-Derry, Chief Executive of the London Borough of Newham said: "Uncertainty caused by the anonymous complaint to the European Commission and ongoing legal challenges have put the Olympic legacy at risk and certainly a stadium, as we envisioned it, may not be in place by 2014 due as a direct result of the legal delay.
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"Therefore we would welcome a move by OPLC and government to end that uncertainty and allow a football and athletics stadium to be in place by 2014 under a new process. If the speculation is true, West Ham will look to become a tenant of the stadium while Newham will aim to help deliver the legacy.
The statement said the West Ham bid was the only one that would secure the sporting and community legacy promise of the Olympic Stadium, providing "an amazing year-round home for football, athletics and community events of which the nation could be proud".
"The true legacy of London 2012 will be the creation of jobs and a generation of young people inspired by sport based around a community home for all by 2014. We remain committed to help deliver that legacy promise to the people of London and the nation," the statement concluded.
A fund of £35m has been set aside from public money to convert the 80,000-capacity stadium at Games time to a 60,000-seater venue afterwards.
Both Tottenham and Leyton Orient launched a legal challenge against the original decision to award the stadium to West Ham.
(DW/GK)
