The new non-emergency NHS phone line has been thrown into turmoil after a supplier pulled out of two contracts, in North Essex and Cornwall, for providing the service.
NHS Direct has said it will be unable to provide the phone line in the two regions - despite winning the contracts to deliver the service.
NHS Direct won 11 of the 46 contracts for the 111 service, but it said it cannot provide the service in North Essex and Cornwall because the contract terms were "financially unsustainable".
In a letter to local health bosses in the two regions, officials said that: "NHS Direct has no option but to exit from the contract.
"The reason for this is that since the launch of NHS Direct's other 111 services, we have established that the contract terms which NHS Direct had entered into are in fact, financially unsustainable."
The NHS 111 line, which replaced NHS Direct as the number to call for urgent but non-emergency care, has been riddled with controversy since its inception on April 1.
The line suffered many teething problems, with patients complaining of calls going unanswered, poor advice given and calls being diverted to the wrong part of the country.
Just a month after its launch medics warned that the "problematic" roll out of the system left many patients not knowing where to turn.
Health officials launched an investigation into the advice line after a number of potentially serious incidents, including three deaths, were linked to the service.
Last week the British Medical Association called for an independent inquiry into the "disastrous" roll-out of the service.
Nick Chapman, chief executive of NHS Direct, said: "In close discussions with Cornwall and the Isles of Scilly and North Essex commissioners and NHS England, NHS Direct has concluded that it is not possible to mobilise these two NHS 111 services, and NHS Direct will exit from the contracts.
"The reason for this is that, since the launch of NHS Direct's other NHS 111 services, the Trust has established that the contract terms which NHS Direct had entered into are financially unsustainable.
"We are very aware of the delays this has caused the new NHS 111 service in North Essex and Cornwall and the Isles of Scilly, and we have formally apologised to the commissioners for this.
"This decision does not affect our other NHS 111 contracts. We have worked with NHS England to agree a plan to ensure we can continue to provide safe and stable NHS 111 services in areas where we are already delivering NHS 111, working closely with local commissioners and other NHS providers.
"Discussions are ongoing with local commissioners, NHS England and NHS TDA about future delivery plans for these services."
NHS Direct's other nine contracts are already up and running, a spokeswoman said.
An NHS England spokesman said: "NHS Direct have written to commissioners in Cornwall and North Essex advising them that they are unable to initiate contracts for the NHS 111 service because they cannot be delivered for the resources within the contracts.
"NHS England is working with NHS TDA, commissioners and NHS Direct to identify a solution for these areas where NHS 111 has not yet gone live and NHS Direct was the provider.
"The 0845 4647 NHS Direct number remains in place in areas where NHS 111 is not yet live."
A Department of Health spokeswoman said: "The majority of the country has a good NHS 111 service but we know that there are still problems in a few areas.
"It is only right that NHS England and the NHS Trust Development Authority both work closely with NHS Direct to help it offer a high quality NHS 111 service."
Health Secretary Jeremy Hunt said the decision was "very disappointing".
He said that despite "teething problems" the 111 service was running "fairly well" in 90% of the country - though it could be improved and was under review.
"It is very disappointing that in two parts of the country where it isn't up and running, NHS Direct - who tendered for these contracts, who named their price, who said what they needed to run it - are now saying that they got the numbers wrong," he told BBC Radio 4's Today.
"I think it is important that we are clear so that the public are not unduly worried: it is running in nearly 90% of the country and it is running fairly well and NHS Direct are not saying they are going to walk away from the other contracts they run."
A review was "asking the question as to whether the 111 concept is right" but the public liked the easy-to-remember number and the direct access it offered to clinicians, he said.
"Can we improve the service you get when you dial 111? I'm sure we can."