The South Hampshire Rapid Transit and Merseytram were relying on £170 million each from the Department for Transport (DfT). But Darling said that costs on both projects had spiralled and the offered funding was being withdrawn amid claims that there is a lack of local support for the schemes.
A spokesman for operator Merseytravel said: "We are currently studying the DfT statement with our partners. Merseytravel is considering a number of options but can make no comment in advance of a special meeting of the passenger transport authority on Monday."
The Merseytram scheme has been mired in funding problems for months.
The government refused to raise its contribution in line with inflation, prompting Liverpool City Council and Knowsley Borough Council to raise a £24 million contingency fund.
Darling originally refused to support the south Hampshire scheme last year. Revised plans had brought the lifetime cost of the project to £200 million, while £10.5 million has already been spent.
Hampshire County Council reacted angrily to the news. Council leader Ken Thornber said the delay in reaching a final decision had contributed to increased costs. "We are now trying to understand the government's figures after the secretary of state said that the scheme is too expensive," Thornber added.
"We think the government is simply using inflation, much of which was caused by delays, to justify dropping this project on the grounds of cost, but we need time to clarify this."
South East England Regional Assembly chairman Keith Mitchell complained that the decision is "a slap in the face for those working hard on planning for the region's future".
A DfT spokeswoman said that Darling decided to withdraw funding from the Hampshire system after costs rose by around 50 per cent. While the government does back tram schemes, she added, it cannot do so at any cost.