Cannot add New Team Project in VS2010. Error TF249063

Cannot add New Team Project in VS2010. Error TF249063

Good day,
I am trying to create a new team project from VS2010. We do currently have
TFS projects on the server. However, once all the detail has been entered,
I get the follwoing error message:
The following Web service is not available:
http://{servername}/_vti_bin/TeamFoundationIntegrationService.asmx.
The web service does not exist on the server.
The folder 'C:\Program Files\Common Files\Microsoft Shared\Web Server
Extensions' does not exist for stsadm.exe.
Can anyone shed some light on the situation at hand?
Thanks.