Plans to build a new primary school in Wisbech have been shelved.
Brooke Weston Trust has decided not to submit an application to the Department of Education as the level of need would not sustain the new school.
The trust was looking to open a 420-place primary school in the grounds of the Thomas Clarkson Academy (TCA) during autumn 2016.
Forecasts predict that there is a shortage of between 35 and 49 school places – the new school would require 60 places to be financially viable.
Project manager Matt Isherwood said: “As a consequence of the consultation exercise and the data from Cambridgeshire County Council, the decision of Brooke Weston Trust has been not to submit an application for funding in this wave.
“We have withdrawn our position with the county council to submit an application for a two form of entry school. However that’s not to say that the project is dead, far from it. We are continuing discussions with the county council to investigate alternative opportunities to make school places available.
“Our professional view is that at this point there is not the level of demand or level of need to warrant a two form entry primary school.”
The county council had approached the trust to get involved with the project after coming under pressure to provide additional primary places in Wisbech due to rising birth rates and migration.
Fenland District Council is predicting within its core strategy that 11,000 new homes will be built in the area between 2011 and 2031.
Cambridgeshire County Council says Wisbech still needs primary places.
A spokesman said: “While we are disappointed with Brooke Weston Trust ‘s decision we strongly believe our figures support the need for extra school places in Wisbech.
“This is especially true as the town has been earmarked by Fenland District Council as a growth area in its local plan.
“We will be meeting with all the Wisbech schools in November to discuss the way forward.”
The trust has been holding consultations with parents in Wisbech during September.
The school was planned to have two classes, comprising of a maximum of 30 children.
The trust was due to submit an application for a free school to the Department for Education, which would have paid for the constructin costs.