Yahoo has withdrawn its bid to purchase 75% of the online video website DailyMotion. This is due to the objections raised by the French government.

The deal was supposed to be the biggest one yet in the ten month tenure of Marissa Mayer, Yahoo's CEO. The 75% was owned by telecommunications company France-Telecom Orange and was valued at US$300 million.

France-Telecom Orange is the joint venture firm of the French government and France's leading telecommunications firm. The objections stem from the concerns that France would be losing control over one of the most successful Internet firms in the deal, according to an anonymous source familiar with the transaction.

DailyMotion is amongst the most popular online sites for video and is second only to Google's YouTube, the world's biggest online video website.

Both Yahoo and DailyMotion declined to make any comment on the developments. As early as last week, the French news media had already reported that the deal was running into trouble.