Donald Trump has cancelled a visit to London next month, blaming the 'Obama administration' for what he described as a 'bad deal' on a new US embassy in the UK.

The US President was due to open the $1.2bn building in February after the old embassy in Grosvenor Square was sold and a new site found in Battersea – which Trump called an 'off' location.

But despite Trump blaming his predecessor, the decision to move the embassy was taken before Barack Obama took office in January 2009 with the US Embassy & Consulates in the UK saying in October 2008 the embassy would be relocated for security reasons.

However, Trump tweeted late on Thursday: '(The) reason I canceled my trip to London is that I am not a big fan of the Obama Administration having sold perhaps the best located and finest embassy in London for "peanuts," only to build a new one in an off location for 1.2 billion dollars.'

He added: 'Bad deal. Wanted me to cut ribbon-NO!'

The prospect of widespread protests on the streets of London if Trump did come was a probable factor in his decision to cancel the trip

However it is likely to put a further strain on links between the UK and the US – traditionally known as the 'special relationship'. Trump has now visited Saudi Arabia, Israel, Italy, China, Japan, France and Germany among others without visiting London.

It comes after Theresa May initially extended an invitation for Donald Trump to come on an official state visit where the Queen would act as Trump's host. However since then no concrete plans have been put in place for a state visit with reports it was downgraded to a 'working visit' following a series of tense interactions between the two leaders.

May said she disagreed with Trump's decision to move the US embassy to Jerusalem, a decision she said was 'unhelpful in terms of prospects for peace in the region'. She also said it was 'wrong' for Trump to share videos by the far-right group Britain First.

The United States is leaving behind an imposing 1960 stone and concrete embassy in London's upmarket Grosvenor Square, an area known as 'Little America' during World War Two, when the square also housed the military headquarters of General Dwight D. Eisenhower.

The new embassy on the South Bank is a veritable fortress set back at least 100 feet (30 meters) from surrounding buildings – mostly newly-erected high-rise residential blocks – and incorporating living quarters for the US Marines permanently stationed inside.

The $1 billion construction, overlooking the River Thames, was wholly funded by the sale of other properties in London.

Additional reporting by Reuters.