The Dutchman was the Cottagers' first choice to replace Roy Hodgson, who left for Liverpool at the start of this month, and it appeared a deal was close after talks between Jol and Fulham chief executive Alistair Mackintosh.

But Ajax were not prepared to let the former Tottenham manager leave and he decided not to pursue the matter further.

Jol told Sky Sports: "I like Fulham, I like London, I like England, so I was a bit disappointed I had to say no because the board don't want me to go under any circumstances.

"He (Mackintosh) was offering me a good job at a good club with good honest players. I was willing to go there but I'm on a contract.

"We spoke about it for hours. It took a long time, which was probably not good for Ajax, and I had to tell them (Fulham) I had to stay. All these problems, going to court, I don't want that."

Jol has two years still to run on the contract he signed last summer after joining Ajax from Hamburg and that proved the decisive factor despite his desire to return to England and frustration with financial problems that have forced the Amsterdam club to sell players.

Fulham quickly conceded defeat and vowed to move quickly to appoint a new manager with less than four weeks to go until the start of the domestic season.

A statement on www.fulhamfc.com read: "On Thursday morning, following talks with Ajax, the club can confirm that it has ceased negotiations for the release of Martin Jol from his contract with the Dutch club.

"Although Fulham had agreed personal terms with Martin Jol, Ajax were not willing to allow him to leave under any circumstances, and have held him to the terms of the contract he signed last summer.

"When Fulham commenced negotiations with Martin Jol, the club was informed that an exit clause existed in his contract with Ajax.

"Subsequent negotiations revealed that the clause was no longer valid and Ajax remained steadfast in their desire to keep their manager, therefore dialogue between the two clubs has now ended.

"Since Roy Hodgson indicated that he wanted to leave Fulham, a shortlist of potential managers was identified, and the club is committed to ensuring that the right candidate is brought on board to continue the club's progress, in the soonest timeframe possible.

"The chairman and CEO would also like to personally thank Ajax for their conduct throughout this very public process."

Ray Lewington remains in caretaker charge of Fulham, who are looking to build on the momentum achieved under Hodgson that saw them qualify for Europe for the first time and reach the Europa League final.

It is thought Jol, who led Tottenham to successive fifth-place finishes in 2006 and 2007, came to his decision following constructive talks with the Ajax chief executive.

Rik van den Boog offered assurances any funds generated from the possible departures of big names Maarten Stekelenburg, Luis Suarez and Gregory van der Wiel this summer would be ploughed back into team strengthening.

Jol added: "The club and I share each other's concerns. Everyone knows that Ajax have financial difficulties.

"But we all want to perform better than last season. The expectations at Ajax are always high.

"Marko Pantelic, Dennis Rommedahl, Kennedy and Gabri have all left the club and we haven't added anyone yet.

"Also, there is the uncertainty about whether a few other key players will stay."

Van den Boog is pleased Jol will remain at the ArenA and insisted there is no problem between club and coach.

"It is annoying it has dragged on for a week," he told the Algemeen Dagblad newspaper. "But the important thing is the result and that is good because Martin continues at Ajax.

"There was a club that wanted our coach. And they approached him at a time when he didn't have a lot of confidence in the squad.

"The coach answered questions about it and was flattered by the attention - that I understand.

"But he is under contract with us and his relationship with the club is good."