Plans for a £100 million power plant are to be scrapped after an agreement was reached with the company aiming to build a Paramount resort.

Teal Energy had wanted to create a centre for non-recyclable commercial waste on the Swanscombe Peninsula, which would generate electricity to power 45,000 homes.

Planning permission had been approved but a planning inquiry was launched after Paramount developers said the scheme would mean they could not build a £3.2 billion entertainment resort, which would create 27,000 jobs.

The inquiry, which was adjourned last week, has now been scrapped after the Paramount team revealed the parties “have reached an important agreement for both projects”.

Teal Energy will now seek an alternative site.

Although it was approved by Kent County Council, the firm had received widespread opposition from both Gravesham and Dartford councils, businesses and neighbours.

Paul Sadler, chief executive of Teal Energy, said: “The Swanscombe Peninsula will be transformed as a result of London Paramount and the Ebbsfleet Garden City. Teal Energy is keen to find an alternative site in north Kent.”

The deal comes a week after London Resort Company Holdings, the developers of the proposed Paramount resort, revealed it had acquired its first 18 acres of land for the scheme.

David Testa, chief executive of London Paramount, said: “We’re delighted to have reached an agreement with Teal – without doubt this is another important step in the right direction for the future of the project.”