Parkin spent the past few weeks negotiating with the Leeds board hoping for a £25m buy-out and despite his accountants and advisors going through the club's finances, he has now been forced to pull out.
Early reports suggest that he has been unable to raise the necessary cash.
With Parkin now out of the frame, managing director David Richmond this afternoon met with Blackwell to formally offer him the position of manager.
It is likely Blackwell will accept the two-year deal that was on offer, despite the way he was treated and his appointment will be confirmed in a statement on Wednesday.
His first job as boss will be to oversee the departure of Alan Smith to Manchester United for £7m, with the Old Trafford club ready to confirm the deal in their own statement to the Stock Exchange in the morning.
Unless further investment is secured from another source, and there are rumours a second group has been watching the Parkin talks unfold in recent weeks, then the threat of administration could again become real.
It is believed the club will survive what could be a stormy summer and they will duly take their place in the Football League, with Blackwell in charge.