The Pars Community terminated discussions after their final offer was not accepted by Gavin Masterton's camp. The club later hit back saying the group had failed to provide proof of the initial £250,000 funding needed for the deal.
Amid the recriminations, a tax bill of around £130,000 needs to be paid in the immediate future with Her Majesty's Revenue and Customs having petitioned for a winding-up order in the Court of Session.
Dunfermline will have to pay that debt within eight days of the notice being published and the club have other debts including to their own staff, who received just over half of their wages at the end of last month.
Masterton announced he was stepping down from the board earlier this month and a steering group was formed to help save the club with director of football Jim Leishman and accountant Stephen Taylor fronting rescue attempts.
But Masterton remains in control both in the fact he and his companies own most of the shares and also because most of Dunfermline's circa-£9million debt is owed to him and those companies. And relations between him and the supporters look to be beyond repair.
A statement from the fans' group read: "The Pars Community has been unable to receive confirmation from Mr Gavin Masterton's representative that its final, non-negotiable proposal was acceptable to Mr Masterton. Accordingly, discussions between TPC and Mr Masterton's representative have unfortunately now terminated.
"TPC has worked tirelessly over many months now and is extremely upset at the outcome of its endeavours."
The club claimed TPC's initial proposal involved Masterton reducing his shareholding to 10 per cent and loans to the club being written down by 60 per cent in return for £500,000, half of which was to be underwritten by a "group of named individuals" and the rest raised by fans.
The club added that a working group secured further concessions that would have seen more debt written off and shareholdings diluted further.
Their statement: "It was expected that heads of terms on that proposal would be signed and that the TPC would commence due diligence, which would have led to the financial transparency they had been so urgently seeking and to verify if the proposed offer was a viable solution.
"However, despite repeated requests to demonstrate that the £250,000 of capital was available by the named supporters to deal with the HMRC issue, the TPC were unable or unwilling to demonstrate such availability.
"This led the club to request the TPC to deposit such funds in an escrow account to be released to the club following completion of due diligence. At that point the TPC withdrew its offer and subsequently submitted a further proposal, but on significantly more onerous terms than their original one.
"DAFC and its representatives sought a meeting with TPC this afternoon to seek assurances, but the TPC declined this request and have now withdrawn their proposal."