Pinewood studios has scrapped its £200m plan to build a 100-acre set in Buckinghamshire that aimed to rival Hollywood for the latest blockbuster films.

The owners of the studios, where the James Bond and Harry Potter films have been shot, had been working on ambitious plan which would have included up to 1,400 homes and 16 "streetscapes" for use in films.

The streetscapes – which would have included a permanent Venice canal, Parisian square, brownstone New York apartments as well as parts of New Orleans and San Francisco – would have been accompanied by apartments and houses for film workers as well as a school, theatre, cinema and sports facilities.

Under the proposed plans people would have been able to live in the buildings when they were not used for filming.

The studio has now ditched its plan, called Project Pinewood, after the government refused planning permission on Friday – which came, ironically, a couple of weeks after David Cameron visited the company. Pinewood Shepperton said that it will "now take time to review the decision in detail".

However, a spokesman for the company said that the studio will not continue to pursue the plans as short of a judicial review, which can only look at the process by which the government has reached its decision, there is no other recourse for it to look to gain permission.

Pinewood has been working on the project since 2007 but has encountered stiff opposition at every stage of the planning process as it involves the development of a large amount of green belt land in Buckinghamshire.

According to financial filings, Pinewood Shepperton has spent a total of £7.6m on the project up until 30 June 2011.

"The company's investment in the Project Pinewood land and costs incurred for the planning application are not material to the long term prospects of the company," said Pinewood in a statement.

Shares in Pinewood Shepperton were down 7.5p, 2.75%, to 265p at 12pm on Friday.

The studio claims that the project, which received the backing of industry figures including Prometheus director Ridley Scott and ad chief Sir Martin Sorrell, would have created 1,000 permanent jobs and injected £3.8bn into the economy over 30 years.

"The company will continue to implement its master planning consents at Pinewood and Shepperton studios and pursue its international strategy of developing studios overseas," said the company.

In February 2011 Pinewood announced a partnership deal to shoo movies at a studio in the Dominican Republic which it hopes will give it a foothold in the fast-growing Latin American film and TV market.

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