Gresham's School has abandoned its bid to develop a town centre supermarket in Holt and withdrawn its objections to a rival store plan.

The decision follows a public consultation by the historic independent school when a large majority of the 130 people who returned questionnaires did not support the supermarket element of Gresham's wider development ideas.

The move has been welcomed by mayor of Holt Bryan Payne, and Tim Schofield, a partner in rival developer Norwood Homes which has applied to build a supermarket on the Thaxters timber and DIY yard site off Old Station Way, Holt.

Gresham's took the town by surprise at the beginning of the year when it announced plans for a 10,000 sq ft supermarket, shop and housing complex on the site of its pre-prep Old School House by Market Place.

It was hoped the project, which would have retained the listed 1858 Old School House, would have helped generate the £10m Gresham's needs to build a new sixth form centre and a modern home for its pre-prep school pupils.

Adel MacNicol, chairman of Gresham's School property development committee, said the consultation, attended by 250 people, had also shown that the public recognised Gresham's importance to Holt and broadly supported the school's wide-ranging development plans.

Gresham's would now revert to an earlier scheme for high-quality mixed residential and commercial development on the site and expected to have plans ready for formal public consultation in the late spring.

The school, founded in 1555, was also exploring ideas for land it owned off Cromer Road.

Mrs MacNicol stressed that Gresham's, working with its development partner Endurance Estates, would ensure any development of the historic Old School House building, which would be retained, was one which the school and Holt 'could be proud of.'

She said: 'It's a very important site, right in the middle of Holt. The school is very much part of Holt and both the school and Holt have to live with what goes there.

Gresham's hoped that its new sixth-form centre would be finished by 2015. As well as the new pre-prep building, it would also like to provide new sports and other facilities in order to ensure the school's future.

Mr Payne said he personally thought Gresham's decision to scrap the supermarket idea was a 'sensible move, adding: 'There was a lot of local opposition to it and it needed much longer for discussion. It was in a delicate area of the town.'

Mr Schofield said he was pleased at Gresham's withdrawal which meant the Thaxters supermarket was now the only one planned for Holt. He wished the school well with its future plans.

North Norfolk District Council planners are expected to discuss Thaxters' scheme on March 21. It would feature architecture influenced by the former Midland Great Northern Railway and have a sales area of about 11,000 sq ft.