Controversial plans to build homes on greenbelt land have been withdrawn amid a row about the way people were “misled” into supporting it.

Liberty Aldenham promised to spend £5million on Aldenham Reservoir if it were given planning permission to build 130 new houses in Centennial Park, Elstree.

But after Hertsmere Borough Council’s planning officers recommended it for refusal, the group withdrew their application.

While some are celebrating victory, others say this cast doubt on the future of the Dagger Lane, Elstree, reservoir and fear this means it could be drained.

The dam needs to be repaired and Hertfordshire County Council’s lease on it is due to expire in December.

Unusually, Elstree and Borehamwood Green Belt Society approved the plans, saying there was no other option to save the lake.

Chairman, Ann Goddard, said: “It was special circumstance. There are no other groups willing to put forward the money to save it. If the reservoir were to go, it would be such a loss to the community.

“The green belt is being eroded all over the country. The council have already agreed to acers of green belt being lost for similar developments, so they are not consistent.

“Saving the reservoir is of national importance. I am absolutely desolate about this. It’s a beautiful thing that has a huge historic interest. I feel very depressed by this. We don’t want it to be drained.”

The reservoir is owned by Safari Investments, part of Liberty Aldenham, but without any other option to save the land, it could be lost forever.

Jim Strother, a member of Aldenham Sailing Club, says this new development leaves the group facing an uncertain future.

He said: “It’s disappointing because we’d like to know our future one way or another, but at the moment we are in limbo.

“When the council’s lease expires in December, it will be in the hands of Safari and we just don’t know what they are going to do with it.

“Instinctively, nobody wants them to build on greenbelt land – but this is the only solution anyone has come up with. The dam is in danger of falling down.

“We’ve been involved in this for around three years and we are disappointed, though are optimistic there will be more discussion.”

But at the other end of the debate, Elstree and Borehamwood Residents’ Association, who spent two weeks leading the campaign against the application, were pleased with the outcome.

Sue Alford, of Hunter Close, Borehamwood, accused Liberty Aldenham of running an incorrect campaign.

The 49-year-old said: “It’s a huge relief and I am very glad to hear they’ve withdrawn it. We thought it was a very misleading campaign.

“It wasn’t crystal clear. They put up banners saying ‘save the lake’ and we had no idea this was all about building homes on green belt land.

“I am delighted, it’s fantastic news, but there are questions that are unresolved. What other options do we have to save the lake?”

Owner of Liberty Aldenham, Nitin Gosrani said, “It is with regret that Liberty Aldenham Ltd has decided to withdraw its difficult decision has been taken following advice and the receipt of a Recommendation for Refusal by Hertsmere Council Officers.

“Liberty Aldenham is hugely disappointed that this course of action is necessary, as we believe our proposals present the best opportunity to keep the lake open for generations of people to enjoy in the future.  

"Liberty Aldenham Ltd will now consider  its options and would like to thank all those residents and supporters who have supported the proposals.”