The UK's largest building society is understood to have terminated the £150,000 contract in August - weeks after appointing Labour adviser Gary Follis to head up public affairs (PRWeek, 3 June).
The news is a blow to Fishburn's public affairs operation as Nationwide is said to have been one of its most prized accounts. The agency had held the business since December 2009.
Nationwide's head of external affairs Alan Oliver told PRWeek: 'We reviewed our requirements and for the time being we will not be using an agency for public affairs.' However, he did not rule out hiring external lobbying support in the future.
Oliver said the decision reflected the fact that Nationwide had recently built up its in-house policy and public affairs team from three to five people.
Follis took the newly created role of head of public affairs and policy in late June, having previously served as a senior adviser to Labour Party chief whip Rosie Winterton. In addition, Nationwide has promoted Richard Wainer to become senior manager for policy and public affairs.
Fishburn Hedges' public affairs practice is headed by former Treasury adviser Dermot Finch. He joined last year from Centre for Cities, the research and policy institute, where he was chief executive.