But St John Homes, the southern regeneration arm of the Berkeley Group, has turned its back on the project after a change of heart during the design workshops last month. St John Homes chief Stuart Wallace said the firm had decided to concentrate on mixed-use developments for central Milton Keynes.
He said: "We decided that we wanted to concentrate on town-centre regeneration.
We are looking closely at the centre of Milton Keynes at the moment."
English Partnerships, which owns extensive parts of central Milton Keynes as well as Oak Grove, denied that the withdrawal of a major player signalled a loss of confidence in the millennium villages, which have had mixed fortunes since their launch in 1997.
Alan Bates, EP's senior regeneration manager for Milton Keynes, said: "We see the regeneration of the whole of Milton Keynes as very important."