Plans for an 8,000-home eco town in Cambridgeshire have been dropped, after super market heavyweight Tesco pulled out of the project.

The Hanley Grange eco town, one of 15 shortlisted by the Government earlier this year, had already faced setbacks when the other major landowner, the Wellcome Trust charity, backed out of the scheme, and it had to be scaled back from 13,000 homes to 8,000.

Local authorities are claiming a victory, with the decision coming after discussions between councils and Tesco. All the Cambridgeshire local authorities, local MPs, and other groups had objected to Hanley Grange being on the eco towns list, as have local residents.

Local authority opposition to the proposals centred on the eco town process bypassing the normal planning system, together with concerns about the suitability of the site itself and the threat a large new development would pose to existing planned development in the district, including the new town of Northstowe.

Cllr David Bard, South Cambridgeshire DC portfolio holder for new communities, said: ‘We are very pleased that the Government now accepts that the best way to proceed with planning for new developments in the district is through the existing planning mechanism of the regional spatial strategy.

‘Together with our partner authorities and alongside people from the area, we’ve worked hard to demonstrate the very real and tangible reasons why the eco town proposal was a bad idea. Today’s announcement is good news for us all.’ Matt Bradney, cabinet member for growth and infrastructure at Cambridgeshire County Council, added: ‘We have worked together to fight this proposal all the way and I thank Tesco for agreeing to now go through the proper planning process, if it wants to take this forward.’