HoF, which is now owned by China's Sanpower Group, had been waiting on a £70m investment from C.banner, which would have given it a 51% stake in the ailing department store.
The department store had agreed to a controversial restructuring deal with its landlords in June.
House of Fraser, which employs around 17,000 people, has said it is speaking to other potential investors about a rescue plan for the business.
Earlier this year, House of Fraser became the latest in a line of retailers to launch a CVA, with plans to shutter 31 of its 59 stores, including its Oxford Street branch.
It had been aiming to buy a 51 per cent stake in the department store's parent group from Nanjing Cenbest, part of China's Sanpower conglomerate, for £70million, as well as pumping a similar amount into the business.
A statement from House of Fraser confirmed it was in discussions with alternative investors, and that it was "exploring options to obtain the required investment on the same timetable". The company had been planning to raise the money needed for the House of Fraser investment by issuing new shares.
Andrew Busby, of the consultancy Retail Reflections, said the chain's only hope for survival could be a merger with rival Debenhams.
But in a statement to the Hong Kong Stock Exchange, C.banner said a slump in its own share price had rendered the transaction "impracticable and inadvisable", and so it was pulling out "with immediate effect". Reports have hinted that potential investors may include Sports Direct boss Mike Ashley. Mike Ashley's retailer had previously offered a 50 million pounds secured loan.
House of Fraser's collapse would mean major job losses for the retail sector, which has already been hit by a string of high-profile administrations from the likes of Toys R Us, Maplin, and Poundworld.
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