The future of a $100 million retail development near Hobart is in doubt after it was approved by the federal government but then immediately dropped by the developer.
Austexx wanted to construct a 17,000 square metre direct factory outlet (DFO) on commonwealth land near Hobart Airport.
Federal Transport Minister Mark Vaile said Tuesday the plan for the construction of a major retail centre had been approved but the size had been cut to about 10,000 square metres.
Austexx said in a statement that it was not prepared to reduce the retail space, based on the larger sizes of its five other successful DFO outlets around Australia. The development had provision for a bulky goods centre, factory outlet shopping and a homemakers centre.
"My decision follows extensive public consultation undertaken by Hobart Airport last year and takes into account the comments made during the process," Mr Vaile said.
"My decision to approve an area smaller than the 18,000 square metres applied for will provide a beneficial development for Hobart while limiting the impact on existing retailers," Mr Vaile said.
The single storey development would have combined the airport retail centre and provided parking for up to 2,300 cars.
Tasmania's Treasurer Michael Aird said he was disappointed that Austexx had decided not to proceed with the DFO.
"The Tasmanian government will continue to do everything we can for Tasmanian consumers," Mr Aird said.
"We will be working hard to breathe life back into this project to make it viable."
He said the Austexx proposal would have been a significant development for the state economy and Tasmania's consumers would be the big losers.
"I understand that Austexx wanted 17,000 square metres and that the 10,000 square metres approved by the federal government is not sufficient to meet their needs," Mr Aird said.
"I hope that the opportunity is not lost forever and that the project can be resurrected after the uncertainty of the federal election is over."