The government set a deadline for midday on Tuesday to reach a deal over the support package for Greater Manchester in order for it to enter Tier 3.
The deadline passed with no deal announced and a few hours later the government said they had been unable to reach an agreement and Manchester would be put into Tier 3 without the support of local leaders.
It appears the two sides were close to a deal and their final demands were only £5 million apart.
With billions already spent throughout the pandemic, it is surprising such a large disagreement has opened up over £5m, what were both sides' position?
What did Greater Manchester want?
The heads of the local councils and the greater authority's mayor, Andy Burnham, have been demanding more support from the government for weeks.
ITV News Correspondent Damon Green on what the local community think
The area has been subject to enhanced measures since July and local leaders have argued the economy has already suffered heavily from it.
They said they wanted more robust financial support to come alongside any more restrictions.
Speaking after talks collapsed, Mr Burnham said they had created a costed plan worth £15m a month to take them until the end of the financial year totalling £90m.
They said over time they had lowered their demands to £75m and then again to £65m
A further £22m to assist with the test and trace programme, compliance and enforcement was also being discussed.
One of the key sticking points was around the local furlough scheme; Greater Manchester leaders wanted to ensure they could pay any employee unable to work 80% of their wages rather then the 66% the government is offering.
Mr Burnham has repeatedly said for a worker on minimum wage 66% of their salary wouldn't be enough to survive.
They have also demanded support for the self-employed, which is not currently covered by the support measures announced by Chancellor Rishi Sunak.
What was the government's position?
It is understood Boris Johnson offered a £60m support package to the area, which had been raised from their original £55m.
The government is keen to not look like it will give into local demands for more money as it negotiates with more areas to be raised to Tier 3.
Nottinghamshire, South Yorkshire and West Yorkshire are currently believed to be in negotiation with the government over putting their areas into Tier 3.
Covid tiers: - What are the differences between each alert level?
Medium (Tier 1) - Rule of six applies indoors and outdoors. Pubs and restaurants close at 10pm.
High (Tier 2) - Households must not mix indoors in any setting including pubs and restaurants. Rule of six applies outdoors
Very high (Tier 3) - Households must not mix indoors, or in private gardens. Rule of six applies in outdoor spaces including parks. Pubs and bars which don't serve meals will be closed
They have already negotiated packages with the Liverpool City Region and Lancashire worth 10s of millions.
The government appears to be pleased with what was negotiated with the two regions in Tier 3 but some local leaders from those areas have complained it wasn't enough.
It appears the government was unwilling to stretch the further £5m to raise their offer to £65m, despite Greater Manchester's leader already lowering their demands by £10m.
They have insisted the local furlough on 66% of wages, augmented by Universal Credit, would be enough for all people who were unable to work due to Tier 3 restrictions.
It takes up to six weeks for anyone to receive their first Universal Credit payment and with the local furlough scheme not being open for applications until December (payments will be backdated to cover November) meaning it could be months until people received any money.
What happens now?
No one really knows. Both sides appeared confident a deal would be reached today after it seemed their positions were getting closer and the need for compromise was understood by all.
ITV News Political Correspondent Paul Brand was told by a source the government may withdraw the £60m offer made by Boris Johnson on Tuesday.
It is not yet clear how much financial support the region will receive when new restrictions are imposed or when it will be handed to local leaders.