DEVELOPER Horizon has pulled out of plans to build a new nuclear power station in Oldbury.

Despite buying land in Shepperdine just off the existing plant from the Nuclear Decommissioning Authority (NDA) at the end of January, the firm announced today that it would be backing out of the project.

German companies RWE Npower and E.On, who formed Horizon Nuclear Power in 2009, have also withdrawn their investment for Wylfa on Anglesey in North Wales, where they were looking to develop a nuclear site.

Both firms said in a statement released today that the global economic crisis had made it too difficult for them raise capital for the projects.

Following Germany’s decision to decommission all its nuclear plants, RWE Npower was also hit by unforeseen costs.

RWE Npower chief executive Volker Beckers said: "We remain convinced that Horizon’s development projects represent excellent sites for new nuclear power stations in the UK. We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors."

The news received a mixed reception in Oldbury, with those on the village concerned with the sheer scale of the project pleased to see it come to an abrupt halt, while others worried about the unexpected blow to the local economy.

Thornbury and Yate MP Steve Webb said: "I think that from the point of view of the community it’s great news. I really don’t think Oldbury was the right site. The old site worked for the existing station but that does not mean it would work for a very big new one."

Oldbury Parish Council chairman Barry Turner also told the Gazette: "A lot of people were very concerned about the scope and scale of the new power station. The Parish Council said from the beginning that we were concerned with the scale and the cooling arrangements. The old station used the river but this one would have required big cooling towers so a lot of local people will be pleased."

"This decision will have its benefits and disadvantages," he added. "There was an economic opportunity and now that’s gone. But it could well be picked up by another company."

With Oldbury Power Station’s recent closure, most of the nuclear workforce in the area had been counting on being hired at the new plant.

And Horizon had confirmed that thousands of jobs would be created.

The firm had already made headway with its proposed design and its experts were in the process of choosing between two possible types of reactors.

Oldbury is still one of the government's eight preferred nuclear sites, however, and any company could easily swoop in and pick up where Horizon left off.