The group, fronted by former Huddersfield chairman Terry Fisher, pulled out of the running after two-weeks looking into the possibility of a deal.
Corporate finance experts Zeus Capital, who had been putting together the consortium's proposal, released a statement through director Richard Hughes.
Hughes said: "Following our financial investigations we have reluctantly concluded that the consortium advised by Zeus Capital Ltd will not be making a proposal regarding Leeds United Football Club."
The news comes just 24 hours ahead of the latest standstill agreement deadline imposed by the clubs' principal creditors.
With Fisher's consortium pulling out, it now leaves the first Yorkshire consortium as the only offer available.