Conspiracy theorist Alex Jones was forced to give up the platform he founded in 1999 after declaring bankruptcy shortly after a court ordered him to pay $1.5 billion to the families of victims of the Sandy Hook Elementary School massacre.

Jones had falsely claimed that the 2012 shooting – in which 20 children and six adults were murdered – was a hoax involving actors.

The Onion had planned to relaunch Infowars as a parody website in a bid backed by eight of the Sandy Hook families.

However, a bankruptcy judge in Texas yesterday refused to approve the sale, saying there was a “lack of clarity”, CNN reports.

Judge Christopher Lopez said the auction process had failed to “maximise value” and may have “left a lot of money on the table”.

The Onion had offered $1.75 million in cash and had struck a deal with the families to forego their portion of the proceeds to bring the overall value to $7 million.

A rival bid from a company affiliated with Jones had made a bid of $3.5 million in cash.

The Onion has said it will “continue to seek a path towards purchasing InfoWars in the coming weeks”.