Following the withdrawal of German interest and there being no requirement for the SR.177 by the RAF, the existing Royal Navy requirement was considered not worthwhile to proceed with. Accordingly, the Ministry of Supply soon chose to cancel the project. On 24 December 1957, a letter from the Ministry was received by Saunders-Roe, announcing the decision to terminate. Saunders-Roe announced that it expected to make 1,000 workers redundant as a result of the termination. As the jigs and near-complete aircraft was disassembled during the New Year, it was decided that the aircraft assemblies themselves should be stored in the event of the project being revived.