THE owners of a site for a planned controversial incinerator have offered to pull out of the deal.

British Sugar has told Severn Waste Services it will return the deposit for the option agreement and waive further payments under the deal.

But Severn Waste has rejected the offer and will press ahead with the incinerator at the Stourport Road site.

A spokesman for British Sugar said its decision was prompted by fresh information that changes to the road network would be "minimal."

"With this new information in mind, we feel we can no longer support the Severn Waste proposal to build the waste burning plant on our Kidderminster site," he said.

"Nevertheless, we are committed legally to the option agreement to sell the land and are unable to cancel the agreement."

British Sugar originally supported Severn Waste's plans because the steam and electrical generating capacity of the incinerator could have been integrated with its own plant.

But this snagged on electrical arrangements for exporting to the national grid and the idea was left out of plans.

This, coupled with the minimal road changes, forced the U-turn.

The £40m incinerator, expected to open in 2003 if plans go ahead, has attracted a welter of protest from townsfolk claiming it will cause health problems and traffic chaos.

Alan Foster, Severn Waste's area director, said he was not disappointed at the change of tack and hoped the two firms would be good neighbours.

"We understand the pressure they have come under," he added.

He refused to disclose the amount of the deposit disclosed.

Although British Sugar will not consider any benefits or alterations to the agreement, Mr Foster said the present one was sufficient.

"As far as we are concerned, they are continuing to be committed. The agreement is sufficient for our purposes and will be going through on the basis of that."

Wyre Forest MP David Lock, who held discussion with British Sugar about its position, welcomed the news.

He said Severn Waste must now recognise the strength of local feeling and the "technical merits of the arguments that this is the wrong site."

"Local people do not want a waste incinerator in Kidderminster. It does not attract public support, it's in the wrong place and it will clog up nearby roads with waste lorries which are already full."