The developer behind a controversial housing plan has pulled out of the project, after spending more than £11 million on it.

The Messenger can exclusively reveal that Land Securities has walked away from plans to build 5,000 homes on the site of the former Lodge Hill army camp at Chattenden.

The news comes a year after councillors approved plans for the development at a special planning meeting.

This week, a spokeswoman for Land Securities said it was “no longer progressing the master plan for a development at Lodge Hill”.

When asked to confirm if this meant the company was pulling out of the development, she said: “That’s correct.”

In its annual report, published in June, the company said it has recognised a loss of £11.3 million in relation to their long-term contract at the site in Chattenden.

The report said this was due to “increased uncertainty” over whether they would be able to recover the costs already spent, and said the decision to call in the proposals for a public inquiry was “disappointing”.

The public inquiry will still take place as the planning application relates to the site not the developer, and Medway Council is still supporting the development.

A council spokeswoman said: “Medway Council and other parties are preparing for a public inquiry which will consider development proposals for Lodge Hill.

“The council continues to support the development, which – if given the go-ahead – would create a new community comprising of 5,000 homes, three primary schools, a secondary school, medical facilities and leisure and retail space on the Hoo Peninsula, providing up to 5,000 jobs.”

The development at Lodge Hill would meet a large chunk of Medway’s housing needs over the coming decades.

It is estimated that by 2035 the The Towns’ population could have increased by up to 60,000, and 1,000 new homes would need to be built every year for a generation to cope with the growth.

An independent assessment carried out by Opinion Research Services last year, calculated population projections for the area and recommended that Medway Council should plan for a medium scenario whereby the population could grow by 42,800 people. This means 25,100 new homes would need to be built by 2035.

Lodge Hill was a key issue during the Rochester and Strood by-election campaign.

Kelly Tolhurst, now MP for Rochester and Strood, had opposed the plan in the face of her colleagues on the the Tory-run council.

She said: “The news that Land Securities will not be pursuing the Lodge Hill master plan, supports my view that the planning application which was granted permission by Medway Council last year is flawed, and in my opinion justifies the reason that this approval has been called in by government.

“I will be making representation at the public inquiry, the date of which is yet to be announced.

“I believe we need to protect our special scientific interest sites, and any large scale development such as this should not be detrimental to our community.”

Despite opposition from most sides of the political spectrum, as well as ward councillors, environmental groups and residents, the plans were approved by Medway Council’s planning committee last September.

Following the approval, the plans were called in by the Department for Communities and Local Government (DCLG) in February – a power only used in exceptional circumstances, a fraction of 1% of all planning cases – leaving the fate of the development in the hands of the government.

This week a spokesman for the DCLG said: “Arrangements for the inquiry were deferred at the request of the applicant. A date for the inquiry will be announced in due course.”

A spokesman for the Defence Infrastructure Organisation, which is responsible for the army’s estate, said: “Our contract with the development partner expired in June 2015.

“We are continuing to work closely with Medway Council. Depending on the outcome of the public inquiry, DIO will consider the best way to dispose of the site.”

Land Securities’ portfolio includes the development of 10,000 homes at Ebbsfleet Valley and Bluewater Shopping Centre.