Campaigners in Weymouth and Portland, Dorset are celebrating after controversial plans for a wind farm in Portland Harbour were shelved this week.

Electricity firm Powergen placed the scheme on hold until at least next year amid concerns over birdlife, the heritage coast and South Dorset's role in the British 2012 Olympic bid.

In an announcement yesterday Powergen said it had reached an understanding with the DTI regarding the timing of consent applications following completion of initial feasibility work and so had decided to shelve the scheme for the time being.

Jason Scagell, head of Powergen Renewables, said: “While the data we’ve been getting has been very good – and we still believe that the harbour would be a viable site for a wind farm – we need to ensure our proposals are in line with government thinking on offshore wind farm policy.”

“We’re certainly not abandoning the project, and will continue with key monitoring programmes in specific areas.”

“We’ve also been aware of some of the concerns of the yachting community over the Olympic bid.”

“While we don’t believe that the turbines would materially affect wind flow, this decision has the added bonus of putting things on hold until after the IOC makes its decision next year on the location for the 2012 Games.”

“We hope that the extra time will give us the chance to continue with our studies into wind patterns in the area.”

If eventually built, the wind farm could produce enough electricity to cater for most of the domestic power needs of Portland and Weymouth and prevent the emission of up to 38,000 tonnes of CO2 every year.

Opponents welcomed the move but pledged to continue the fight to bury the proposal for good. Bill Ludlow, chairman of Weymouth and Portland Sailing Academy, said: "It is good news… The wind farm was set to spoil the finest small boat waters in Northern Europe."