The owners of New Chums Beach in Coromandel have withdrawn a proposal to sell the land into public ownership.
Coastal Land Trust Holdings and the Environmental Defence Society put forward the plan in December last year to develop only part of the land behind the beach and sell the rest.
The society's executive director, Gary Taylor, says the landowners feared the offer would be turned down prematurely because of the Christchurch earthquake in February and have withdrawn their proposal to rework it.
Mr Taylor says the New Chums developer is not walking away, just trying to find an option that Government and other parties will support.
Radio New Zealand News understands a central issue is the cost after a valuation done for the Government put the land's worth at about $10 million - half the original estimate.
The Labour Party says the withdrawal of the offer to sell New Chums Beach to the Government is very disappointing.
The groups intend to modify the proposal and resubmit it. But Labour leader Phil Goff says it would have cost the Government only $5 million to $10 million and it should have tried harder to reach a deal.
Conservation Minister Kate Wilkinson is surprised at the late withdrawal but says she is prepared to evaluate any future proposals.
