The Rudd Government has buckled under pressure from the big supermarkets and abandoned its $13 million election promise to force grocery prices down.

The joint might of Woolworths and Coles has successfully blocked the Grocery Choice scheme just six days before its scheduled launch next Wednesday. The price monitoring website had promised to impose unprecedented transparency on the powerful supermarket duopoly.

After a heated meeting in Canberra yesterday, attended by Coles, Woolworths, Franklins, Aldi and Metcash executives, the Minister for Competition Policy and Consumer Affairs, Craig Emerson, made the decision to scrap the website.

Dr Emerson denied he had been bullied into the decision. "I take responsibility for the decision, I am the minister," he told the Herald.

He denied the project had been scrapped because Woolworths and Coles were refusing to co-operate and allow the consumer advocate group, Choice, which took over the widely criticised project in January, access to their pricing data systems.

An angry Choice chief executive, Nick Stace, last night said his organisation was seeking legal advice. "I am furious, unbelievably furious," he said.

"This was the site the big supermarkets didn't want you to see. I cannot believe that the first act by the new consumer affairs minister is to side with the big supermarkets. Perhaps the minister for consumer affairs should change his name."

The dumping of Grocery Choice is another blow to the Prime Minister's campaign to control living costs. The petrol price monitoring scheme, FuelWatch, was cruelled by the Senate last year. This week the Herald reported that consumers had ignored the much-vaunted BankWatch plan.

Kevin Rudd strongly supported the project. "When families fill up their baskets and trolleys at the local supermarket, they should not have to worry if they are getting a raw deal by inflated grocery prices," he said before the election in 2007.

Choice had spent five months working with SMS Management and Technology, employing 15 people spread across Sydney, Canberra and Montreal to create the world-first software designed to compare the weekly price fluctuations of thousands of grocery items across 7000 supermarkets.

Mr Stace had promised the project would usher in an era of accountability for supermarkets and give consumers an unprecedented bank of knowledge to make informed decisions on where to shop.

But the Herald understands relations between Coles, Woolworths and Choice became increasingly strained, with only Aldi and Foodworks co-operating fully.

Mr Stace said the big chains had failed to meet deadline after deadline. On Tuesday he met Dr Emerson and advisers from the Prime Minister's office. "I was told, 'This is an election commitment. We are fully behind this'. It's an amazing about-turn. There was no indication he was about to pull the plug."

But Dr Emerson said that after yesterday's talks with the industry he believed the project was unworkable.

"For the site to be of great value to customers it needs to cover all the major stores and the information needs to be relevant at the individual store level in a timely manner.

"It is difficult being able to envisage that if the major supermarkets cannot provide it."

Neither Woolworths nor Coles would comment on the decision. The chief executive of the Australian National Retailers Association, Margy Osmond, said in a statement:

"We have always maintained that Choice's model was fundamentally flawed, as retailers could not provide the data Choice was demanding."