A planned judicial review into Defra’s decision to withdraw PFI credits for an energy from waste plant in North Yorkshire has been dropped.
North Yorkshire County Council and City of York Council had begun the legal challenge after Defra withdrew £65 million of PFI credits for the facility last year.
Following further legal advice, the councils have decided that proceeding with a judicial review would not be in the public interest.
However, the councils have still to decide whether to proceed with the contract with AmeyCespa as there will be a termination fee of up to £5 million if they decide to cancel.
AmeyCespa won the contract to design, build, finance and operate the plant for 25 years with the option for a further five years in December 2010.
North Yorkshire County Council corporate director business and environmental services David Bowe said: “We worked closely with Defra for many years on this project and feel very disappointed by the way they have conducted themselves but we now have to accept that the argument is not worth pursuing.”