Fostering New Links was set up with the aim of keeping young people out of secure or high-support residential care, but Coram Family, which ran the service, found it hard to make the project financially viable.
Gillian Pugh, chief executive of Coram Family, said the model for the scheme was sound, but it was ahead of its time in the complexity of the joined-up service it was trying to provide.
"It is our intention that elements of Fostering New Links' work will be picked up and integrated into other Coram Family services and the work of other agencies," she said.
Established in 1998, the service was provided by foster carers in their own homes, supported by social workers, psychiatric therapists and teachers.
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