Boyd arrived at Forest on Thursday morning but the transfer collapsed at the 11th hour over what Peterborough described on their official website as an "inconclusive eye test". The two clubs had agreed a fee and personal terms had been agreed with Boyd, who had a loan spell with the Reds towards the end of the 2009/10 season.
Peterborough's director of football Barry Fry laid the blame firmly at the door of the Al-Hasawi family, and he said: "(Forest boss) Alex (McLeish) has been a gentleman over this, it was the owners who pulled out and they are a disgrace to the game. I don't know how they can call themselves fit and proper."
It is understood that McLeish still wanted to press ahead with a permanent transfer but the club's owners, the Al-Hasawi family, were willing only to sanction a loan deal.
Fry added: "I can't understand why they called it off 12 hours after his medical and after Alex spent three weeks trying to get the player.
"We've never had any problems with George and he's in bits. Alex still wanted to do the deal but the owners said no. Alex has been having rows with them for a couple of days about transfer targets. I wouldn't be surprised if he walked over this."
Rumours did circulate on Thursday night that McLeish was so furious with the lack of transfer activity at the City Ground that he had resigned, but McLeish has since denied he had fallen out with Forest chairman Fawaz Al-Hasawi.
A statement from McLeish on Forest's official website read: "Fawaz is a strong individual, he is the owner and isn't a successful businessman for no reason.
"Sometimes he will say no to my requests and suggestions and sometimes I will say no to his because I am a strong manager.
"If that's the level of the alleged 'bust-up' then I guess we'll be reading about more managers having them with their owners this week."