SYDNEY (Reuters) -Australia's Star Entertainment said on Wednesday an up to A$940 million ($590 million) refinancing proposal with investment group Salter Brothers Capital had collapsed, leaving it to rely on a rival deal with U.S. casino group Bally's Corp.

Sydney-based Star, Australia's no.2 casino operator, said a number of conditions required for the Salter proposal to go ahead were unlikely to be satisfied in sufficient time to meet the current liquidity needs of the company.

The development is a major blow to Star, which has been struggling to stay afloat amid a growing debt crisis and regulatory investigations at the casino group over the past two years.

Star shares remained suspended from trading on the Australian Securities Exchange, and the company said "there remains material uncertainty as to the Group's ability to continue as a going concern."

Star has enough cash to remain operational for one week, the Australian Financial Review reported on Wednesday, citing sources. The casino group did not immediately respond to a request for comment on its cash position.

Star said the Salter Brothers talks ended after extensive negotiations between the two firms, state governments and regulators.

"It became apparent that it was unlikely that a number of the conditions precedent to the refinancing proposal would be able to be satisfied at all or in sufficient time to address the current liquidity needs of the company," Star said in an exchange filing.

"In particular, lender requirements for specific priority arrangements and enforcement rights in relation to their proposed security of non-gaming assets of The Star could not be met."

Star said it was now exploring a refinancing solution with Bally's from March 10, referring to an A$250 million recapitalisation package that would give the casino group control of 50.1% of Star.

Star continues to be unable to lodge its half-year results in the absence of an appropriate refinancing proposal.

($1 = 1.5913 Australian dollars)