The Ministry of Justice has withdrawn its application for a 1,500-capacity prison near Wickford, Essex
The scheme on the site of the former Runwell hospital was due to be considered by Chelmsford council on Tuesday night but the Ministry of Justice wrote to the council to formally withdraw its application.
The government said it had made the decision because the council’s planning officer was recommending that the application be rejected, as the site had been earmarked for housing.
The prison is one of five similar schemes planned under the previous government, but sites for the other four have yet to be found.
The Ministry of Justice said it would resubmit the application, but there are doubts that any new prisons will be built after justice secretary Ken Clarke announced that the number of prisoners is already too high.