A grant of £1.4m to demolish the building and construct a new one was secured by EGBC from the Department of Culture, Media and Sport as part of its Youth Investment Fund.
EGBC said around £200,000 of the money had already been spent on preparatory work and surveys.
After its initial contractor pulled out of the project, it found a new one who was “ready to go” when it heard the rest of the funding was being withdrawn.
Jay Solder, deputy county director of EGBC, admitted there was a “slight shortfall” between the grant and actual cost of the build, but his organisation had enough funds to cover it.
“But that wasn’t enough for SIB to deem the project worthy of continuing,” he told the BBC.
“I just couldn’t believe that we’d invested so much time into a project, to get it so close that everyone was ready to get working – for them to still say ‘no’, it was gutting really.”
John Plummer, treasurer of both the Lifstan Boys Club and Southend Amateur Boxing Club, said he feared the two clubs would “become extinct” without a new building.
“I think that’s disgraceful that it could happen,” he said.
“I hope we find a solution but I can’t see one in the near future.”