The DIY chain had been expected to sign a three-year contract worth £21m to replace nPower as the backers of all three Football League divisions from the start of next season.
According to the Mail, talks broke down on Monday with the Football League unaware why B&Q, who had previously shown huge enthusiasm for the sponsorship, had changed their mind at the last minute.
The disappointment at the breakdown of the deal is compounded by B&Q, who have stores near numerous Football League clubs, being regarded as such a good fit for a sponsorship that has proved difficult to fill.
B&Q's exit leaves the Football League commercial department having to go back to the companies who had shown interest before attention was turned to finalising the B&Q deal.
One of those companies is restaurant chain Domino's Pizza, who have released a football app and a football sitcom on their Facebook page.
With only a couple of three months untilthe start of next season's it is a race against time for the league. Especially as they are also fighting a battle with the Premier League over TV monies and parachute payments.
Unlike the Premier League clubs, most League clubs rely on gate recipts and commercial revenue to stay afloat, part of which comes from the league. The clubs will be watching anxiously, hoping for positive outcomes in the next few weeks.