Planners have made a U-turn on proposals to build 500 houses in a rural area west of Burgess Hill.
West Sussex County Council aimed to develop the homes as part of its Deposit Draft Structure Plan.
But a report by the Government in March said the plan should be shelved because the town could not sustain such a major development.
Today the county council published a draft response to the report, accepting the proposal is dropped.
The report will go before the council's strategic environmental services select committee on June 25.
Comments on the plan will be invited during a six-week consultation period, due to start in September.
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