THREE months after threatening action in the Land and Environment Court, the opponents to the controversial Fishermans Bay housing development have claimed a victory in the battle to save the 23 hectares of bushland.
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UrbanGrowth, formerly Landcom, has withdrawn its application for a 104-lot housing estate with the announcement made on Friday.
"This is a wonderful day and a victory for people power," said South Tomaree Community Association (STCA) president Roz Scholes on Friday.
"It has been a hard fought battle and one we could never have achieved without the support of the Anna Bay community and the Newcastle University legal centre.
"It is our intention now to have the pristine and environmentally sensitive land returned to the people ... we want it reclassified as public land."
The decision by UrbanGrowth to withdraw its application has disappointed Port Mayor Bruce MacKenzie.
He vowed he would "live to see the day where there will be houses on this land".
"I have no doubt that many of the Anna Bay residents opposed to this development had their homes built on similar parcels of land."
The STCA announced in May it would fight UrbanGrowth, claiming the process had disregarded the presence of threatened species, including koalas and the squirrel glider.
Earlier, a four-man Joint Regional Planning Panel, which included Port councillors MacKenzie and Paul Le Mottee, gave UrbanGrowth the green light to push ahead with the $12.5 million subdivision which had been earmarked for housing back in 1991.
Port Stephens Greens welcomed the decision by UrbanGrowth to abandon its plans for an ill-conceived development.