Eastleigh Football Club has shelved plans to create a "stadium of dreams" at its Ten Acres ground.
The dramatic move comes less than two months after Whitehall forced a public inquiry into the proposed £800,000 ground makeover which the Jewson Wessex League Club hoped would boost its chances of climbing into the Southern League.
The ambitious club thought victory was in sight when back in October Eastleigh council gave the green light for major improvements which included a new clubhouse, changing facilities, new stand and community sport facility.
Major upgrading of the Stoneham Lane ground hinged on selling two acres of the site for a leisure and fitness club.
But the club's ambitions suffered a major setback when last Secretary of State for Transport, Local Government and Regions Stephen Byers decided to be referee and call in the application.
Because the Stoneham Lane ground is in undeveloped land between Eastleigh and Southampton it was always on the cards that the government office for the south-east might want to look at the application.
Fighting a public inquiry and not knowing which way the result would go could have left the club with a hefty bill.
This was a major factor in the club deciding to withdraw its planning application.
Club chiefs, who will be meeting to discuss the way forward, are still determined to improve the ground in a bid to clinch Southern League status.
Currently midway in the Jewson League, the club has become a nursery for promising players with its Hampshire Youth under-18 side reaching two cup finals and also within grasp of winning its division.
In a statement Eastleigh FC general secretary Mr Derik Brooks said: "Eastleigh Football Club is disappointed to report its planning application for improvements of their ground and facilities at Ten Acres have had to be withdrawn.
"The scheme that was to provide Eastleigh with a new club house, changing facilities, new stand and community sport facility with revenue from the sale of two acres of land for a fitness club was given approval by Eastleigh Borough Council in October last year."
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