I also recomend reading "The Murder of TSR2" by Stephen Hastings if you can get hold of a copy. My grandfather was working for Rolls Royce at the time and the cancellation really upset him.
Politics was the problem, the Americans didn't want the British selling a bomber that could compete with and beat the F-111. I believe that when the project was cancelled the RAF was meant to buy F-111s which they never did and when they eventually got Tornadoes in the 80s the aircraft were not really more capable than TSR-2 would have been if produced 10 years earlier!
A great tradgedy, yet again British designers came up with a world beater and didn't get the backing!