Developers Greenway Land LLP submitted a bid to the department for communities and local government to build an 'eco-town' at Little Horwood, but the bid has not been included on a shortlist of 15 released by the Government last week.
Residents and council leaders opposed to the development were celebrating the news this week, but are concerned the developers could attempt to have their plans included in Aylesbury Vale District Council's local development framework, which provides guidelines for the size and type of development allowed in Aylesbury Vale.
Cllr Llew Monger, a member of Winslow Town Council's development committee, said: "It is good news for now. The development remains a threat to Winslow and the Horwoods."
Martyn Twigg, project director for Greenway, said: "We are reviewing the decision by the Government not to include Greenway as one of those shortlisted eco-towns. The fact it was not included as an eco-town does not alter our primary strategy of promoting the project through the local development framework so the transport, infrastructure, educational, community, recreational and social benefits can still be realised."

The North Bucks Parishes Planning Consortium, which represents 17 parish and town councils, has welcomed news the Little Horwood proposal, which was submitted by Greenway Land LLP, has been rejected.
Chairman Frank Donlon, who is also chairman of Little Horwood parish Council said: "This is fantastic news. Residents in all our 17 member towns and villages will be relieved, but those who live in the close vicinity of the site in Little Horwood, Great Horwood and Winslow are especially delighted."
Aylesbury Vale District Council has also welcomed the Government's decision saying the district already had to accommodate nearly 27,000 new homes by 2026, including a Milton Keynes overspill of over 5,000 dwellings in the Newton Longville area.
Local authorities will be consulted on the shortlist of 15 bids until June 30, with the shortlist to be whittled down to a list of 10 successful bids. The Government hopes to begin construction on the first 'eco-towns' in 2010.