When I did a Prince II project management course several years ago, one of the important things taught was to not necessarily keep throwing money and at the project in order to successfully finish it. It's not always the best solution and method of achieving a successful result.
Some times it's best for each party to mutually withdraw from the project.
For them to have canned the project it probably meant that a good ending was not obtainable in the forseeable future!
As much as I don't like to say it, the Liberals are solely to blame, whilst indirect responsibility would ultimately lie with the working committee of which the Defence Minister would be a part.