Chateauroux - Yellow jersey contender Bradley Wiggins crashed out of the Tour de France after being caught up in a crash on the race's seventh stage on Friday, suffering a broken collarbone in the process.
"Today it all went pear shaped," said Team Sky sporting director Sean Yates.
"For Bradley it's mega disappointing. He's based his whole year on this."
Wiggins finished fourth overall in 2009 and, after his recent victory in the Criterium du Dauphine, the Englishman was considered a strong challenger to reigning champion Alberto Contador and Luxembourg's Andy Schleck.
On what is their second participation in the world's premier cycling event Sky celebrated their first win on Thursday when Norwegian Edvald Boasson Hagen won the sixth stage to Lisieux in Normandy.
However the team's hopes of seeing Wiggins become the first Briton to finish on the podium ended around 43km from the end of the 218 km seventh stage to Chateauroux.
As the peloton continued to close a gap of around 2min 46sec to a five-man breakaway, a crash - the cause of which was not immediately known - took down around a dozen riders.
As well as Wiggins, fellow podium hopefuls Levi Leipheimer and Ryder Hesjedal came down. Although they finished the stage both dropped well down the standings.
"We had three guys down, at least," added Yates.
"There were three broken bikes - Rigoberto (Uran), Bradley and Christian Knees. It was a bit of a mess.
Wiggins, the recently crowned British road champion, got up holding his left arm and obviously in pain.
Tour medical officials later said Wiggins had broken his collarbone.
After being given medical assistance at the side of the road, Wiggins's race came to a definitive end when he was helped into an ambulance.
Welsh team-mate Geraint Thomas said only heard Wiggins had crashed after the incident.
"We sat up in the front, me, Swifty (Ben Swift) and Gerro (Simon Gerrans) and loads of groups went past and we said 'where's Brad?'," said Thomas.
"Finally it came on the radio that he had broken his collarbone and was out.
"It's really disappointing for the team but we've got to put it behind us. It's sport at the end of the day. It happens."
With Sky's Tour campaign based mostly on helping Wiggins, the team will now change tack and start targeting as many stage wins as possible.
"We're just looking forward to the stages now, take it day by day and just attack it," added Thomas, who is widely considered a big yellow jersey hope for the future.
"We've lost our GC (general classification) contender, but there's still two weeks to go."
Stage winner Mark Cavendish, who is being tipped to leave HTC-Highroad and join Team Sky for next season, said he was "gutted" on hearing the news.
"It's quite distressing to hear. He was on the form of his life," said Cavendish, who took his second win of this year's race and 17th of his career.
"I really think he would have done something here. I'm gutted for him, and I wish him a speedy recovery."