Plans to privatise parts of Surrey Police have been halted after security firm G4S failed to get enough staff for the London 2012 Olympics.
The West Midlands and Surrey forces had drawn up a shortlist of six groups that were bidding to take over "middle and back office functions", including G4S.
Surrey Police Authority (SPA) voted to suspend the plan on Thursday.
Members told an authority meeting they were unhappy that G4S had not recruited enough guards for the Games.
They also said most of the police and crime commissioner (PCC) candidates for Surrey seemed to be against the plans.
West Midlands Police Authority, which was considering similar privatisation plans, has also deferred its decision until after a police commissioner has been elected, according to the Unison union.
About 100 West Midlands police staff held a protest in Birmingham earlier against the proposals, which they said would lead to the privatisation of the force.
In a statement issued earlier, Crawley-based G4S said its Games deployment was "unprecedented and very complex" and being "carried out to a very tight schedule".
The firm said it had 4,000 staff working across 100 venues and more than 9,000 people were still being trained, vetted and accredited.
The government has authorised the deployment of an extra 3,500 military personnel to contribute to Games security, bringing the total number of servicemen and women covering the Olympics to 17,000.
Following the decision, Surrey Police Chief Constable Lynne Owens said: "Over the last six months, we have learnt a huge amount about how partnering with the private sector could work, and our investment in the project to date has been both insightful and useful in considering how best to shape the force in the future.
"However, I can accept and appreciate that the SPA is reluctant to put the force in a position where it is investing taxpayers' money without being fully confident that it can deliver such a programme which effectively benefits the people of Surrey.
"I am committed to prioritising the delivery of front-line policing and maintaining financial stability for the long term.
"In order to achieve this, we will continue to look at opportunities to collaborate with other police forces, develop relationships with other public services and, if appropriate, revisit the benefits of partnering with a private sector organisation."
'Look to withdraw'
The authority's chairman Peter Williams said that potential PCC candidates were now actively campaigning to put a stop to business partnering, and the authority agreed it would not be prudent to continue to invest Surrey taxpayers' money in a programme that seemed unlikely to be brought to a fruitful conclusion.
Mr Williams added: "Members agreed today that it is right that we should suspend our involvement in the programme at this time, and that we should look to withdraw altogether following a more detail assessment of our options in September."
In May the two forces released the names of six groups of companies that they intended to hold talks with.
Unions, including Unite and Unison, had expressed concern over the plans to outsource some roles to the private sector, saying they would put jobs at risk.
The six groups of companies announced as part of the Business Partnering for Police Programme in May were:
- British Telecommunications, Reliance Secure Task Management and Vanguard Consulting
- Capita Business Services
- G4S Care & Justice Services
- Kellogg Brown & Root and IBM United Kingdom
- Logica UK, Amey Community and Northgate Information Solutions
- Serco, HP Enterprise Services, and Accenture