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One of the bidders to become one of Gordon Brown鈥檚 10 eco-towns has pulled out from the contest, prompting accusations the government鈥檚 initiative is falling apart.

East Lindsey District council, who had been promoting one of the 15 shortlisted locations, Manby, said yesterday it was withdrawing its bid following massive local opposition.

The council said it would instead seek to promote alternative routes to secure funding for much needed coastal defences and affordable housing in the area. Its bid for Manby had envisaged the eco-town development paying for measures to reduce coastal flood risk.

Council leader Doreen Stephenson, said: "It was important to have had this debate and that we clearly identify key issues raised by the eco-town expression of interest.

We must now focus our efforts on securing a realistic, funded range of opportunities that will address the core issues of affordable housing, skill development and investment in the District."

The withdrawal leaves the Communities department considering just 13 genuine eco-town bids, despite short-listing 15 possible locations. Two of the fifteen 鈥� Leeds City Region and Rushcliffe - had not identified exact locations for the towns at the point of short-listing, and full bids are yet to come forward. At the same time one of the shortlisted areas 鈥� Marston, is now being considered as two separate proposals.

A number of the potential locations were also severely criticised this week by the government鈥檚 Challenge Panel, set up to improve the quality of the bids.

This week housing minister Caroline Flint refused to confirm that ten eco-town locations would definitely be selected, saying only that 鈥渦p to ten鈥� sites would be found.

Shadow Housing Minister, Grant Shapps, said: "We are witnessing the slow death of eco-towns even before they have been built. Day by day the eco-town story changes. First Labour said they were going to build ten eco-towns now they say they hope to build up to ten towns.鈥�

"Eco-towns won't meet their twin objectives of tackling the housing shortage and being environmentally friendly.鈥�