In a Tweet delivered at 2.25am Washington time, Trump said: “3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let ObamaCare implode, then deal. Watch!”

The decision by McCain came after weeks of brinkmanship and after the dramatic entrance to cast the decisive vote to start debate on the bill earlier this week by the cancer-stricken senior senator. The GOP’s “skinny repeal” was defeated 49-51, falling just short of the 50 votes needed to advance it. Had the vote been a tie, Vice-President Mike Pence was on hand to cast a deciding vote in its favour. But it wasn’t to be.

Republicans Susan Collins of Maine and Lisa Murkowski also voted against it.

Collins voted no first, then Murkowski, followed by McCain, who came to the well of the Senate and gave a thumbs down, dooming the repeal bill to loud gasps, mostly from the Democratic side of the aisle. Republican leaders stood together looking grim as their back-up repeal plan collapsed.

It wasn’t immediately clear if McConnell would seek to try again with yet another version or abandon the effort. The Senate is scheduled to be in session into mid-August.

But McConnell has struggled to find a compromise that satisfies conservatives, who have demanded a wholesale repeal of Obamacare, and moderates, who have been unnerved by predictions the bill would significantly boost the ranks of uninsured Americans.

Republicans had said late Thursday their plan was to get the “skinny” bill through the Senate and then negotiate with the House on a broader agreement to repeal and replace Obamacare.

“Passing this legislation will allow us to work with our colleagues in the House toward a final bill that can go to the president, repeal Obamacare, and undo its damage,” McConnell said Thursday night on the Senate floor. “I urge everyone to support it.”

Senate Democrats immediately blasted the new measure and called for bipartisan talks on fixing Obamacare.

“This bill is lighting the American health system on fire with intentionality,” Democratic Senator Chris Murphy said after the text was released.

McCain had been seeking an iron-clad guarantee from House Speaker Paul Ryan that, if the Senate approved this latest proposal, the House would not move to quickly approve the bill in its current form and instead engage in a broad House-Senate negotiation for a broader rollback of the law. Ryan issued a statement intended to assuage the concerns of McCain and two others, Senators Lindsey Graham and Ron Johnson, but McCain - the 2008 presidential nominee - apparently deemed the Speaker’s statement as insufficient.

The standoff between the two chambers highlighted the extent to which Republicans have still not reached a consensus on how to rewrite President Barack Obama’s 2010 health-care law, and the degree to which Republicans are repeating many of the same back-room manoeuvres that Democrats used seven years ago to approve the Affordable Care Act, more commonly referred to as Obamacare.

McConnell’s draft rattled both moderates and hardline Republicans, who wanted a more robust uprooting of the existing law.

“I’m not going to tell people back in South Carolina that this product actually replaces Obamacare, because it does not, it is a fraud,” Graham said at a Thursday evening news conference with McCain and Johnson at his side.

After weeks of secretive negotiations, McConnell unveiled this draft only a couple of hours before what was expected to be a cliffhanger vote early Friday.

Shortly after it was introduced, the Congressional Budget Office issued an estimate finding that 16 million people would lose coverage and that premiums would rise roughly 20 per cent a year between 2018 to 2026 compared to current law if Republicans enacted the pared-down bill.

Sara Rosenbaum, a health law and policy professor at George Washington University, said the bill would make “enormous” changes to private and public insurance.

Translating their pledge to repeal Obamacare into a law has proved embarrassingly difficult for Republicans. First, the House took an extra six weeks to pass its version of the bill in early May. Most Republicans agreed that the measure was flawed - Trump later called it “mean” for how it would deny insurance to 23 million people - and hoped that the Senate would craft a better bill.

But McConnell’s closed-door negotiations ended in gridlock, leaving him to pull together this “skinny” repeal of the ACA, just to keep alive negotiations with the House to come up with a different plan later this summer.

Major insurers are warning that the proposal could destabilize the individual insurance market. Blue Cross Blue Shield Association criticised it on Wednesday, and on Thursday the industry’s largest trade group suggested it was unacceptable.

“We would oppose an approach that eliminates the individual coverage requirement, does not offer continuous coverage solutions, and does not include measures to immediately stabilise the individual market,” America’s Health Insurance Plans wrote in a letter to Senate leaders.

Additional reporting by The Washington Post