The tournament had been reduced to 36 holes for the second year in succession, but torrential rain left parts of the Santo da Serra course under water.
Winds gusting up to 47 miles per hour meant no play had been possible on Thursday, while further strong winds on Friday caused a delay of almost two hours before rain ended play early.
Half of the field had yet to complete their rounds when play was abandoned for the day at 6pm and more rain which flooded the course caused further disruption on Saturday.
With yet more bad weather forecast for Sunday, the decision was taken to make it a 36-hole event, with the top 65 and ties due to play the final round in a shotgun start at 8am.
Denmark’s JB Hansen held the clubhouse lead on four under par, one shot ahead of a group of eight players including England’s Andrew Marshall and Scotland’s Peter Whiteford, with the entire field separated by just six shots.
It is thought to be the first European Tour event to be cancelled due to bad weather since the Compaq European Grand Prix at Slaley Hall in 1998.