WTA's big wheel (pictured) is half the size of the London Eye

City councillors were due to discuss plans for the 180ft-high wheel at Tower Gardens on the banks of the Ouse at a planning meeting on Thursday evening.

But World Tourist Attractions Ltd (WTA) told the council on Thursday morning it had withdrawn its application.

Planning officers had recommended the project be rejected.

Flood fears

The council had received dozens of objections from nearby residents who felt the scheme would pose a threat to their homes by displacing flood water from the River Ouse.

The company said it had withdrawn its plans while it tried to answer those concerns.

But a spokesman said it was finding it difficult to meet conditions laid down by the council and the Environment Agency aimed at minimising the wheel's effect on flood water flow.

Council planners also feared the wheel would distract motorists on the city's inner ring road, particularly when illuminated at night.

They also said the 365-tonne construction, which would dwarf the nearby historic Cliffords Tower, would be "over-dominant and overbearing".

WTA plans to either re-submit the plans for the same site or for another, as yet undisclosed, site in the city.