NEW YORK (Reuters) - Sprint Nextel Corp and Clearwire Corp are scrapping their agreement to jointly build a nationwide high-speed wireless network based on the emerging WiMax technology, the Wall Street Journal reported on its Website.

Citing people familiar with the matter, the report said the complexities of the transaction and the departure last month of Sprint Chief Executive Gary Forsee made it too difficult to reach a final agreement.

Sprint and Clearwire said in July they agreed to connect their WiMax networks, share costs and offer services to about 100 million people by the end of 2008.

The details were expected to be finalized by mid-September, but Sprint Chief Financial Officer and acting CEO Paul Saleh told analysts last week that the two companies were still in discussions.

Sprint declined comment and Clearwire could not immediately be reached for comment on the report.

WiMax promises faster wireless connection speeds over longer ranges than the current WiFi standard, but its commercial viability has yet to be proven.

With the departure of Forsee, analysts have said Sprint may scale back its WiMax plans as investors were looking for the No. 3 U.S. mobile service provider to cut spending after more than a year of subscriber losses.

Sprint has said it would spend $5 billion by 2010 on WiMax and Saleh said last week there has been no change to the company's plans for the next-generation network.

If the partnership unravels, it would be a blow for Clearwire, which was founded by cellphone pioneer Craig McCaw. The Sprint deal would have helped Clearwire expand its geographical reach without huge buildout costs.

Shares of Clearwire fell nearly 16 percent in early October on worries that the Sprint partnership was at risk.

Intel Corp is also a big promoter of WiMax, with other backers including Nokia , Motorola Inc , Samsung Electronics and Google Inc .

The Wall Street Journal said some of these companies may try to inject financing into Clearwire to help keep its WiMax project on track, citing people familiar with the matter.

The report said it was unclear whether Sprint and Clearwire would pursue another arrangement. They control complementary swathes of radio spectrum around the United States and are the only two U.S. carriers pursuing WiMax.

Sprint's board had considered spinning off the WiMax unit and merging it with Clearwire, or bringing in a consortium of strategic investors to help finance the project, the Journal said. Any significant transaction would likely have to wait for Sprint to hire a new CEO, it said.

(Reporting by Sinead Carew and Tiffany Wu; Editing by Lincoln Feast)
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