A BID for a 20-year oil drilling project in ancient woodland has been dropped within days of a crunch decision.

UK Oil and Gas Investments (Ukog) has withdrawn plans to drill up to four oil wells in the South Downs in a shock move.

The application, which has attracted some 2,000 objections, was due to be determined later this month.

Environmental campaigners have hailed the withdrawal of the “dangerous and destructive drilling proposals”.

The oil field at Markwells Wood, 20 miles west of Chichester, was discovered by Northern Petroleum in December 2010.

Ukog, which owns the “Gatwick Gusher” oil field at Horse Hill where 100 billion barrels of oil are estimated, had hoped to carry out a test drill and up to three production wells.

Among those opposed were the Environment Agency, which was warned the plans could pose an “unacceptable risk” to water supplies.

Brenda Pollack, from Friends of the Earth, said the application was set to be heard on May 11 but Ukog had been seeking more time to respond to the Environment Agency.

She said: “We hope they have seen sense that this is not the right place for this type of project. This should not be going on in the South Downs National Park.

“The issues are not just about the water contamination risk but also traffic issues. There have been serious misgivings from the community and statutory bodies about how Ukog were going to deal with these risks.”

South East MEP Keith Taylor said it was “a welcome victory” for campaigners against “dangerous and destructive drilling proposals” which would preserve the “beautiful and unique habitat” of rare ancient woodland.

He added: “It is one small, but important, victory in a region-wide fight against oil and gas drilling plans that will see the beautiful South East countryside pock-marked will wells.

“New oil and gas drilling operations are an affront to local communities and a dangerous form of climate change.”