Following days of deliberation, judges decided a dramatic design by UK- based John McAslan & Partners would suit the project. However, council leader Gordon Matheson then immediately said it would not go ahead.
Instead the square will get a only relatively minor spruce-up in time for the Commonwealth Games. The only change visible will be the replacement of the red surface.
The decision not to proceed with any of the six shortlisted designs has cost the city council almost £90,000.
Mr Matheson said: "The people of Glasgow have made it clear they do not want a radical redesign of the square.
"They want the square to look better and be a place of which they can be proud - a place they can while away a sunny afternoon or celebrate the big occasions in the life of the city.
"They also want us to keep the statues where they are, and they like the grass. However, they clearly want rid of the red Tarmac.
"I am proud to say that I am listening to them.
"We will carry out this refurbishment work in time for the Commonwealth Games and only if there is public demand thereafter, will we consider a radical change.
"The companies asked to produce designs gave us stunning plans, any one of which would have looked fant-astic and I would like to thank the arch-itectural firms involved for their time and hard work.
"I also want to thank the members of the jury."
A council spokesman said: "A report will go to the executive committee on February 7 setting out which firm won the design contest and the administration's intention to carry out an extensive refurbishment of the square, getting rid of the Tarmac."
OPPOSITION councillors said the process was "farcical".
Councillor Martin Doch-erty, SNP representative for Anderston/City, said: "The entire process for the redevelopment of George Square has been a farcical vanity project led by Gordon Matheson.
"The consultation process was flawed from the start by the council leader's determination to remove the famous statues in the square and minimise grassed areas.
"The people of Glasgow have had next to no formal input into this decision, which makes a mockery of Labour's mani-festo commitment to listen to local communities. Gordon Matheson's volte face cannot hide his poor judgment in leading a limited public consultation on the proposals.
"Almost nothing which Gordon wanted to see happen in George Square will take place, yet what the public want, a grassy George Square, will not happen either. The decision to retain the statues is welcome, but the decision remains a fudge of the highest order".
Mr Matheson has said repeatedly George Square is not fit for the 21st Century. Pledge number 55 in Labour's manifesto for last May's election says the party will "revamp and completely refurbish George Square".
As a result, an inter-national design competition was launched and 35 submissions received from as far away as Australia, America and Sweden.
A shortlist of six was drawn up and last week a panel of five judges met to decide which scheme should get the go-ahead.
It had been expected they would announce the winner on Friday but they failed to reach a unanimous decision. They met again yesterday but again failed to reach a consensus.
Instead a majority voted for the John McAslan design - only for Mr Matheson to say it will not go ahead.
The judging panel was made up of Mr Matheson, David Mackay, a partner in MBM Architects Barcelona, Professor Andy McMillan, former head of the Mack-intosh School of Architect-ure at Glasgow School of Art, David Harding, former head of environmental art at the Art School and Geoff Ellis, DF Concerts director.
THE panel's technical adviser was Neil Baxter, secretary and treasurer of the Royal Incorporation of Architects in Scotland.
They had considered submissions from Agence Ter in France, UK firms Burns + Nice, Gustafson Porter, jmarchitects and John McAslan & Partners and James Corner Field Operations from the US.
Between them, they are behind some of the most dramatic architectural designs in the world.
However, in Glasgow, they faced a backlash from people furious about plans for a radical redesign of the square and the possible removal of the statues.
Instead, residents called for the square to be reinstated to its "former glory" with flower beds and trees.
Council insiders insist that is not an option if the area is to be used for major events such as the Christ-mas lights switch-on which attracts 17,000 people.
Many city residents were also unhappy at the lack of consultation over the plans with one petition signed by 900 people accusing the council of paying lip-service to consultation. The council was asked why there had been no detailed consult-ation with the public before the competition launch.
A SPOKESMAN said: "The research we did was entirely appropriate and told us what people wanted to have in the square.
"They wanted a square that was nice to look at and sit in, had more staged events and had statues.
"Five of the six designs fully met that and the sixth partially met that.
"But when we started to implement those desires it became hugely controversial and people could not agree on what they wanted.
"People don't want a substantial redesign of the square. We have listened."