Sefton Central Labour MP Bill Esterson said the decision by David Wilson Homes to withdraw their application to build 274 homes on greenbelt land in Formby would be welcomed by many people.
DWH withdrew their application on Wednesday afternoon - just days before Sefton's planning committee were due to meet to consider whether to approve the plans.
Sefton Council planning officers had already recommended that the application be refused as the site was greenbelt.
Sefton Central Labour MP BIll Esterson, who opposed the application and even submitted a formal written objection to the plans, said he welcomed the decision
Bill said: "I am pleased about the decision on behalf of the residents of Formby.
"Throughout residents have raised concerns about the impact of this development on the community of Formby.
"There were very clear reasons why residents were worried about these plans most notably under the existing local plan is the fact that it is on greenbelt. As it stands, Sefton Council has a clear policy of no building on the greenbelt, so there was no other logical recommendation.
"A number of people wrote to me and contacted me to detail their own personal objections to these plans.
"What was repeated over and over again, was the concerns about the impact on the local infrastructure. The impact on the already congested roads, the impact on the already stretched drainage system, the impact on our local schools, etc. In my letter of objection to this proposal, I detailed these concerns.
"I was pleased that Sefton's planning offices recommended the application be refused, and I think that David Wilson Homes have done the right thing and withdrawn the application all together.
"It shows that when residents and council work together then a local approach can be taken."
But the MP gave a word of warning.
Bill said: "We need to give this news a cautious welcome. This application was recommended for refusal by planning offices because it was on greenbelt land. Sefton's current policy is for no building on greenbelt. But the impact of the government’s national planning policy framework means that may change as the council will struggle to fund development on brownfield sites.
"But for now the views of the local community have been considered which is as it should be.
"We clearly need housing, we clearly need jobs and growth but it needs to be done with the community in Formby and the way that this planning application has been handled shows that council and community have worked together with the support of the councillors for the area.
"I would pay tribute to everyone who has been involved in the campaign to oppose this scheme, including all those behind the scenes who fought against the application behind closed doors both borough and parish councillors deserve credit."