Bidder leading proposed Curborough scheme says it will look into developing an alternative to the eco-town on the same site

Another of the developers behind one of the government's shortlisted eco-town locations has dropped out, leaving just 12 in the process.

Banks Developments, leading the consortium behind the proposed Curborough development at Fradley near Lichfield, said in a statement it would instead continue to pursue an alternative, non eco-town development on the same site.

The scheme was heavily criticised by the government’s Challenge Panel set up to improve the quality of the eco-town bids. It has withdrawn following discussions with the Communities Department over the past week.

David Gosling, development planner at Banks Developments, said it would have been difficult to reach the standards expected of an eco-town development because of the initial cost of the land on which the town is planned.

Banks Developments has options on the site but does not own it outright, and would have to spend a large amount assembling the land.

Gosling said: “The government said they wanted a national demonstration project – well, that requires a situation in terms of land holdings that allows that to happen. It was different circumstances for us than some of the other sites.”

The government said they wanted a national demonstration project – well that requires a situation in terms of land holdings

David Gosling

However, Gosling maintained the firm was supportive of the government agenda, and had not withdrawn because of excessive bid costs, despite estimates they would run into “hundreds of thousands of pounds”.

Banks has already submitted a planning application for a new town on the site, and will now pursue this application through the normal planning process.

The development is the third of the 15 shortlisted sites to withdraw from the process, following decisions by council leaders in Selby and East Lincolnshire to quash local proposals. Banks’ decision prompted calls from the Conservative Party for Labour to abandon the programme.

Grant Shapps, shadow minister for housing, said: “Gordon Brown’s approach to housing is now so discredited that developers are opting to pull themselves out of the government-backed scheme and go it alone with their planning applications.

"Labour ministers need to understand that they can’t simply sit in Whitehall and mandate top-down Whitehall targets to get the job done.”

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