Disney has shut down production of The Lone Ranger, its ambitious retelling of the classic western that was to star Johnny Depp.

Sources tell The Hollywood Reporter that the abrupt move to kill a project that was set to begin shooting in the fall comes amid clashes with producer Jerry Bruckheimer over the budget for the tentpole, which was scheduled to be released in December 2012. A Disney spokesman did not return calls.

Lone Ranger was heralded by Disney as a potential franchise starring the bankable Depp as Tonto and Armie Hammer as the Lone Ranger. Gore Verbinski, director of the first three Pirates of the Caribbean films, was set to helm.

The move is a direct blow to Bruckheimer, who has produced the four mega-hit Pirates films for Disney. It also raises questions about whether Depp will agree to reprise his starring role in another Pirates film, which is a priority for the studio.

The halt is all due to budgetary concerns, not creative differences, sources tell THR. The studio is said to have given Verbinski a firm budget number but the director balked.

“Gore doesn’t want to budge for what he thinks a movie like this needs,” says one insider.

One concern for the studio, according to an insider, is that even though Depp is the biggest star in the world, the project is a western, and the genre is having some dark days, particularly in light of the recent poor showing of Cowboys & Aliens.

“The fact that it’s a Western is a definite concern,” says one source.

While budget numbers for Ranger are hazy, Disney already has a number of expensive projects in the can, or in the works, including John Carter ($250 million-plus) and Oz The Great and Powerful, currently in production.

The move, of course, raises a slew of questions: What does this mean to the relationship between Disney and Bruckheimer, which is already under strain due to its expensive nature and Bruckheimer’s cold streak (Pirates 4 notwithstanding)? And how does this affect the studio’s relationship with Depp, the star of several billion-dollar hits for the studio, and who may now be less inclined to make a fifth installment of Pirates?

Depp has been involved with the Ranger movie since September 2008, when at a studio preview then-chairman Dick Cook brought out the actor for a surprise announcement. The double surprise was that Depp would portray Tonto, the Ranger’s Indian partner and not the Ranger himself.

The project heated up later last year when Verbinski came on board as director, and soon Hammer, riding high from his turn as the Winklevoss twins in The Social Network, signed on to play the Ranger.

Ranger was casting up and galloping towards an October start.