Gregory Lynn, who was leading the Prince Charles Cinema (PCC) bid, said administrators handling the sale of the Lothian Road building had told him his bid had been unsuccessful.
It is believed the frontrunner has lodged a bid “substantially” higher than the others submitted.
It has also emerged that a crowdfunding campaign led by former Filmhouse staff and backed by leading film industry figures had failed to raise event half of its £2 milion target.
Leading figures involved in the “Save the Filmhouse” campaign insisted it was “too soon to throw in the towel” over the future of the building.
Howeve confirmation the PCC bid has been rejected casts major doubt on whether cinema-going will survive at the site, where the Filmhouse started operating in 1978, and where the Edinburgh International Film Festival (EIFF) will stage many of its events when it is rebooted.
Mr Lynn said: “We’re absolutely gutted. We spent a fair bit of money on our bid hoping that the cards would fall in our direction. It’s a real shame.
“The most important thing in the big picture was to get the building’s doors reopened as a cinema. It was more likely that a developer would come along with an offer which needs a change of use to do something else with the building. It would be horrific for Edinburgh."
The administrators insist they are still speaking to several parties about the sale of the three-screen Filmhouse, which closed in October after arts charity Centre for the Moving Image went into administration. A key aspect will be whether any conditions are attached, including securing planning permission for a change of use of the B-listed building.
It is understood as many as 14 bids have been made for the building, which was marketed as a “unique leisure and development opportunity” when it was put up for sale last month.
Selling agents Savills said: “We believe the property would be suited to a number of alternative uses, subject to obtaining the necessary consents.”
A spokesman for administrators FRP Advisory said: “There has been an encouraging level of interest. We are continuing to engage with a variety of parties and we will provide an update in due course.”
Mr Lynn, who runs the PCC with business partner Ben Freedman, had pledged to reopen the Filmhouse by the spring after refurbishing the building, which he claimed had been “run into the ground” under its previous operator, and overhaul its programming to win back audiences with “an eclectic mix of world cinema”.
He insisted the venue would continue to be a home for "cultural cinema”, as well as play host to the EIFF and other events which have been regularly staged at the Lothian Road venue.
However, Mr Lynn’s bid had failed to secure the backing of a crowdfunding group led by former senior staff at the Filmhouse, who secured the backing of more than 1,700 donors, but failed to reach their £2 million fundraising target.
Former chief executive Ginnie Atkinson, former head of programming Rod White, former head technician David Boyd and former programme manager James Rice were among those involved.
They had warned the loss of the Filmhouse building, its programming ethos and its specialist equipment would be “catastrophic” for the provision of cultural cinema in Edinburgh and would also hamper efforts to revive the film festival.
The group had accused Mr Lynn's team of orchestrating “a very clever piece of PR” in announcing their plans, suggesting the bidders had implied “that they care about cultural cinema” when they were a “straightforwardly commercial business”.
A new statement issued after Mr Lynn admitted his bid had been unsuccessful said its Filmhouse crowdfunder would remain open until “all avenues have been explored.”
The campaign group said: “Wednesday 7 December was the closing date for offers on the Filmhouse building at 88 Lothian Road. The deadline was high noon. We knew there would not be an instant result.“The timescale for raising funds was very short. Fundraising for capital projects normally takes months or years.
“With various donations from generous major donors, personal trusts and individuals, as well as the amazing crowdfunder, we raised £764,000 in three weeks from a standing start. This is inspiring – but unfortunately it was not enough. “It’s thought that the minimum offer would have needed to be £1.5m. This is more than disappointing. Nevertheless, we cannot thank you all enough for offering your tremendous support to Filmhouse.As well as being a significant element in the overall financial picture, this crowdfunder has demonstrated that there truly is a groundswell of support for reviving Filmhouse as a mission-driven cultural cinema with a strong educational remit. We’d like to thank Creative Scotland and the City of Edinburgh Council for their support throughout this process.“There are rumours swirling around, so we wanted to update you all about our thoughts on the current situation. We think it is too soon to throw in the towel. Too much remains unknown and as long as there is a possibility of some accommodation being reached with a third party who also wants to save Filmhouse, we’d like to keep that option open. So we don’t want to close down the fundraiser until all avenues have been explored."We hope you agree and can hang on a bit longer until there is greater certainty about the future of 88 Lothian Road.”