THE wide-ranging fallout from the MFS financial crisis hit another Far North Queensland project yesterday with all work stopping on the controversial Reef Cove Resort project.

Developers Reef Cove Resort advised all contractors to stop work on the project pending clarification of financial arrangements with the troubled MFS.

A spokesman for principal contractors CEC, Andrew Griffiths, said his company had advised all sub-contractors of a "moratorium" on work at the False Cape site yesterday.

One sub-contractor who contacted The Cairns Post yesterday afternoon said his company had told him to get all machinery and equipment off the site mid-afternoon.

However, Mr Griffiths said he believed the problem between MFS and Reef Cove would be resolved "fairly quickly".

"I am sure this will be resolved quickly," Mr Griffiths said.

Neither Reef Cove chairman John Ewens nor managing director George Tout returned phone calls or e-mails yesterday afternoon while MFS was also remaining quiet about the future of its projects.

Work on the next stage of the Bale Resort at Port Douglas, which is a joint project between MFS and The Ray Group, stopped more than three weeks ago with contractors still to be paid. Last week, MFS spokesman John Hurst said work had stopped while MFS completed a review of its financial position following the sale of 65 per cent of the Stella Group business.

The Stella Group controls numerous accommodation properties and resorts in Cairns and Port Douglas.

It is believed MFS has placed the Sheraton Mirage at port Douglas on the market as part of its latest fire sale.

MFS had previously tried to sell the Sheraton Mirage but rejected a $60 million offer from Juniper last year.

The Ray Group and prominent Melbourne businessman Lloyd Williams are reported to be interested in buying the Sheraton Mirage.