Le Masurier have decided to halt their £75 million scheme to redevelop their Bath Street site, because they have no confidence in the planning process.
They claim they have spent a year trying to agree a development brief with the Planning Department, but have faced constant delays and u-turns.
Brian McCarthy, Managing Director, C Le Masurier Limited, said: "It is with deep felt regret, that we have no option but to down tools on our Parkside Village project. Following a positive public consultation, we thought we had agreed a brief in July but now we have been presented by Planning with unacceptable wholesale changes, which make our proposals totally unviable."
*Asking the company to build an underground car park for 200 spaces, when the development already includes 130 spaces for residents, plus shopper parking.
*Paying for a transport link north to south of the development, in addition to their planned pedestrian link east to west between the Odeon cinema and Halkett Place.
*Asking for a strong justification for the removal of historic building 92 Bath Street, when the Planning Minister had already indicated it could be demolished.
Mr McCarthy said: "It is impossible to make sensible progress and we cannot risk spending millions of pounds on a planning application, without the certainty of due process and the department's commitment to a transparent service."
The Jersey Construction Council says it's disappointing to lose a scheme that would have provided several years of work from building 200 homes, as well as shops and cafes.
Martin Holmes, President of the Construction Council said he's bemused: "The scheme fitted within the island plan to build on brown field sites. We have a north of St Helier masterplan that talks about private sector landlords being instrumental to development, and here we are at the beginning of the process on a major site and the private investor has not got the confidence to move forward with planning and that must raise some very serious questions about the role of planning as an economic enabler."
Jersey's Chamber of Commerce is now calling on the Chief Minister to launch an independent review of the Planning Department.
The Head of Planning, Andy Scate, refutes Le Masurier's claims and thinks the company is using the department as a scapegoat to hide their real reasons for pulling out of the project.
He said: "The guidance has not been changed significantly and I consider the statements from the company to be untrue. I am at a loss to understand why a planning application will now not be submitted, after the very close and regular working that has taken place.
"The decision not to proceed, is in my view simply an attempt to blame the planning system instead of being open that this is a commercially motivated decision by the company."
Andy Scate also wants to remind people that their role is to oversea and police developments.
"We believe the brief that has now been agreed by the Minister offers an excellent opportunity for this area of town to be developed and see no reason why a planning application for this site cannot be progressed.
"While Le Masurier have chosen to blame their decision on the planning process, other factors such as market confidence, demand and financing opportunities, could well have contributed to their decision."