A deal to use two cruise ships as accommodation for police officers during the 2010 Winter Olympics Games has broken down, security officials said late Wednesday.

"The contract was terminated as both parties were unable to come to terms on elements of the contract," said Cpl. Jen Allan, a spokeswoman for the integrated unit in charge of security for the Games.

Last April, the unit, which is made up of municipal, provincial and federal security personnel, had put out a call for proposals for accommodation on large vessels, and in June, officials announced they'd signed a contract.

The winner was Victoria-based Cruise Connections Charter Management, which was to provide ships to house 5,000 people and around-the-clock service.

A representative of the company gave a loud sigh and simply said "no comment" when reached by telephone on Wednesday.

Allan also refused to elaborate on what caused the $37.5-million deal to collapse, but she said the unit is still looking for ships and expects to reissue a contract tender shortly.

"We remain confident that our accommodation needs will be met by industry," she said.

It's unknown whether there were other bidders for the initial contract who may now get a second chance.

Ships remain a good option for the force, Allan said, because they keep police officers close to the venues and easily accessible and free up scarce hotel rooms in Vancouver for Olympic spectators.

Security budget still not released

The security unit had announced earlier this year that it had also signed a contract to take over a downtown Vancouver hotel to house some of its staff.

Though the contract award notice said the Blue Horizon Hotel was granting "exclusive use" to security personnel, later negotiations have resulted in some rooms being freed up for the general public.

They have been snapped up by tour operators, who are now selling packages at the hotel starting at $2,950 per person, which includes six nights at the hotel and hospitality. The packages don't include tickets to Olympic events.

Officials with the unit said they aren't concerned about compromising officers' security by sharing the facility.

With just over a year to go to the 2010 Olympics, a budget for security still hasn't been released, although former Public Safety Minister Stockwell Day had earlier said he was hopeful it would come in November.

But a spokesman for the Public Safety Ministry said Wednesday that negotiations for the security budget are ongoing.

The original figure was $175 million, although Day has said it could be as high as $1 billion.