The club's future looked to be more secure after administrator Trevor Birch managed to offload several first-team players including Liam Lawrence and Tal Ben Haim recently.
However Chainrai has now released a statement, in which he gives the reasons for his decision, and criticises administrator Birch.
"Portpin Ltd regrets to announce that it is withdrawing its bid for Portsmouth Football Club," Chainrai stated to Sky Sports News
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"Unfortunately, our efforts to save the club once more from extinction have hit a wall of rejection and lacking co-operation from the administrator and other interested parties.
"As history has recorded, we sold the club over a year ago after saving it from liquidation and unfortunately found ourselves again fighting to try and save the club from another liquidation.
"Through this administration process over the last six months we have always had the club's best interest in mind - unlike many parties who were involved in the process.
"We repeatedly encouraged the administrator to find a new, willing and able buyer to take over the club - unfortunately he was unsuccessful in this job and couldn't find a buyer despite his promises!!
"Later he approached us to be his safety net to save the club as he couldn't find a buyer. We agreed in the effort to avoid liquidation of the club.
"All of these facts have left us in a position that we no longer want to fight this battle, we have zero support to save the club therefore we formally withdraw our bid and our honest attempt at saving the club. We will sleep well knowing we did our utmost to save the club.
"We welcome and will assist anyone, including the supporters trust to try and save the club in the coming days."