Shropshire Council's cabinet voted to go ahead with an extra stage of consultation on its draft local plan at a meeting on Monday, but the draft does not include the Bradford Estates proposals for land north of junction three of the M54 and west of Tong.
Reacting to the decision Viscount Alexander Newport, managing director of the Bradford Estates, welcomed the council's decision to hold a fresh round of consultation on its plans, but said not pursuing their proposal was a "missed opportunity" for the council.
Lord Newport also suggested that he will continue to pursue the possibility of making the controversial project a reality.
He said: "Monday’s cabinet meeting shows that all major housing development can be controversial.
"It is interesting and welcome to see the council pausing in response to the significant change in local and national circumstances.
"However, while the council has clearly acknowledged the need for more growth, we feel the exclusion of the many benefits of the strategic development at junction three from the draft Local Plan represents a missed opportunity.
“Despite J3 being dropped for now, we remain confident in its potential.
"With 8,000 jobs and a £390 million annual regional boost, sustainable development at J3 has an integral part to play in the future economic development of the county and the wider West Midlands.
“We plan to explore all available avenues to ensure that the exceptional benefits of these proposals are realised.”
The proposals have attracted criticism from Wrekin MP Mark Pritchard, members of Tong Parish Council, and the campaign group Shifnal Matters.
In the report on the plan considered by council cabinet members, officers had said they did not believe there was enough evidence to justify the 'exceptional circumstances' needed to release green belt land for development.
The report said: "In weighing up the site specific considerations, both positive and negative, and giving consideration to the consultation responses on this matter, it is considered there is insufficient justification to progress an exceptional circumstances argument for the release of this land from the green belt."