The Paradox Interactive Forums has the announcement from Paradox COO Susana Meza Graham that they have decided to "freeze" development of Runemaster, expressing regrets over the decision concerning this "very ambitious" role-playing game (thanks Gamer's Hell via rpg codex). Here's word:

I have some news to share with you today regarding Runemaster. After much internal debate we have made the decision to freeze development of the project until further notice and move the development team working on it to other projects within Paradox Development Studio.

This was not an easy decision to make - Runemaster was a very ambitious project for us, and the team working on it brought all of their passion, dedication, and talent to the table. Despite our best efforts and a couple of re-scopes, Runemaster in its current form was unable to live up to the standards we set for ourselves here at Paradox.

Runemaster was a different type of game for us, and even though we were not able to fully realize our vision for it, we will take the lessons we learned to heart as we move forward with new endeavors. We will also look into how we can re-use the best parts of the game in other ways.

Our aim is to let all the talented developers who worked on the project to remain with Paradox Development Studio and bring their expertise to the other great games currently in development.