Vestas Wind Systems has dropped plans to build a factory in the UK after no orders were signed for the turbines that were to be produced there.
Vestas said in a statement it would not proceed with plans to build the factory at the port of Sheerness, which would have created 2,000 direct and indirect jobs in the area, but said its commitment to the sector was unaffected.
The group declined to give details regarding reasons behind the termination of the project, but confirmed it had received no orders for the V164-7.0 megawatt turbines that would have been produced at the factory.
"Such a factory is conditional on concrete orders in our order book and we have not announced any signed orders at this point," a Vestas spokesman said. "We want a good pipeline of orders before we advance further and we do not have that at this point in time."
The decision by Vestas will hit the local economy around Sheerness particularly hard, Energy Minister Charles Hendry said.
Hendry defended Britain's position as a global leader in green energy, pointing to Sunsolar's decision this week to build a solar panel manufacturing plant in the UK after winning a £5 million government grant.
"Promising offshore wind manufacturing projects are being taken forward by other firms, including Siemens on the Humber (on the east coast of England) and Gamesa in Leith (in Scotland)," he added.
Vestas in May signed an option agreement on 70 hectares of land at the port of Sheerness in Kent in southeast England, with the aim of building a factory that could support the construction of its recently launched V164-7.0 megawatt turbines.
It said the agreement was subject to a satisfactory order intake for the turbines that would be built there.
"Vestas' strong commitment to the development of both the offshore and onshore wind industries is not affected by this decision," Vestas Chief Sales Officer Juan Araluce said in a statement. He added Vestas would remain active across the two markets in the UK, which continued to show considerable potential.
"We are extremely disappointed that we have been unable to conclude the agreement with Vestas," said Mark Whitworth, chief executive of Sheerness parent Peel Ports, in the statement.
"We remain fully committed to the strategy outlined for the Port of Sheerness of attracting major renewables manufacturers," Whitworth added.
The pullout deals a blow to what energy secretary Ed Davey last week described as a "strategic industry of national importance" on which Britain's "clean energy future depends."
Speaking at the RenewableUK global offshore wind conference in London last week, Davey said: "So it's time for us to see it for what it is: an industry of strategic national importance ... One that can help us secure our energy supplies, reduce our dependence on imported fossil fuels, and protect our environment."