Hopes that a luxury boutique hotel would open at Woolley Hall look to have been dashed after the application was withdrawn.
Planning permission had been sought to convert the old country house into a prestigious destination venue which would create more than 150 jobs.
As part of the deal, Wakefield Council agreed to sell the site on condition that the hotel plans were given the green light.
But Commercial Development Projects Limited, which is behind the plans, sent an email to the council to say they have withdrawn the plans, but gave no explanation.
The firm declined to comment when contacted by the Express.
In reaction to the withdrawal, assistant chief executive for resources and governance at Wakefield Council, Michael Clements said: “Wakefield Council agreed to sell Woolley Hall to a local developer last year.
“The sale was conditional upon them developing the site into a boutique hotel.
“Disappointingly, this deal has now fallen through.
“We are aware of other interested parties who would like to purchase the site and are now looking to re-market it as soon as possible.”
Commercial Development Projects Limited had intended to open a luxury 88-bedroom hotel with function facilities to cater for almost 300 people, spa treatment rooms and a gastro restaurant with fine dining options.
They said the hotel would be ‘designed to the highest specification and quality to reflect luxury status’.
The Grade-II listed building, which dates back to 1635, sits in more than seven-hectares of parklands and has been used as a college and wedding and events venue over the years.