An appeal to build a controversial £100million biomass plant in the Suffolk countryside after plans were turned down has been dropped.

The long-running saga over the proposed Mendlesham Renewable Energy Plant appears to have come to an end after renewable energy firm Eco2 announced it has withdrawn its appeal because of “time constraints”.

Agricultural companies had raised serious concerns over the proposals for the straw-burning biomass burner at Wetheringsett, near Stowmarket, after they were announced in November 2011.

They claimed up to 3,500 jobs in East Anglia’s agriculture and food and drink industry would be put at risk amid fears food and farming firms could be driven out of business with the straw-burning plant causing the commodity’s price to rise.

Campaigners had also won the support of Dr Dan Poulter, MP for Central Suffolk and North Ipswich.

Planning permission was refused by Mid Suffolk District Council in July last year, prompting Eco2 to launch an appeal.

Today, a spokesman for the company said there is “insufficient time” to finance the project under the “current funding arrangements for renewable energy projects of this type”.

She said: “The closure of the renewables obligation and uncertainty over ‘Contracts for Differences’ on dedicated biomass projects following an overhaul in the electricity market has made projects like the Mendlesham renewable energy project a much less attractive investment.”

Dr Andrew Toft, director of projects at Eco2, added: “I am personally very sorry to be missing the opportunity to explain, again, why this project would be good for Suffolk and not the threat that opponents claimed.

“But we have to accept the time constraints and move on.”

The company claimed the proposed 40 megawatt plant would have generated 300 million units of electricity and saved around 150,000 tonnes of carbon dioxide emissions every year.

It had also been reported that the project would have brought a total inward investment to the area of around £120m.

The company spokesman added the firm will now turn its attention to the overseas market due to Government policy towards biomass.