One of the main housing developers behind plans to build two new eco-towns in Mid Bedfordshire has withdrawn from the project.

Gallagher Estates has informed the Department for Communities and Local Government (DCLG) that it does not want to be part of the scheme.

The company blamed its decision on the lack of an overall vision for the area from the Government.

In a letter to the DCLG, planning director Greg Mitchell said: "What we do not want to see is an on-going process of piecemeal planning for the area as we have seen over the past ten years as illustrated by Center Parcs, NIRAH, the Elstow South landfill proposal, Bedfordshire county Council's waste local plan together with the Bedford to Milton Keynes Waterway.

"Currently there is no overarching vision."

Marston Vale is one of 15 areas shortlisted by the Government for its plans to build ten eco-towns in England by 2020.

The development would see 15,000 new homes being built between the outskirts of Bedford and junction 13 of the M1, on sites including the former Kempston Hardwick brickworks and alongside the Marston Vale railway.

An extension of The Wixams development would be included.

Local residents and Mid Beds Conservative MP Nadine Dorries have opposed the eco-towns proposal, but they are now divided over what Gallagher's decision means.

Iain Clapham, chairman of the Lidlington Action Group, believes the news means that new houses are now more likely to be built on farm land, rather than the mix of greenfield and brownfield sites previously touted.

He said: "There is more money to be made from turning farm land into housing estates, and the Government will take a good chunk of that to fund the necessary infrastructure that it can't afford it pay for itself. This is how the Government will pay for the schools, the social housing, the GP clinics and the like.

"We are still struggling to understand how these can be 'eco-towns'. It will mean building a great big road right through the Vale."

But Nadine Dorries, MP for Mid Bedfordshire, predicted the move will kill off the prospect of eco-towns in Mid Bedfordshire.

She said: "I was expecting this. Over time I believe investors will walk away from this scheme, and the eco-towns will die a death.

"The new homes do not have planning permission at the moment, the economic situation is getting worse, and there is no guarantee that there will still be a Labour Government in a few years' time.

"Investors in these schemes want to know when they will get their profits and what it will be.

"A Conservative Government would be unlikely to back these schemes because people simply do not want them. They will be homes built with no jobs, with people having to commute to work in their cars every day, and they simply do not look attractive."