County Hall has dropped plans to build 240 houses and a Lidl following concerns about a proposed toucan roundabout.
Norfolk County Council was seeking permission for the houses and supermarket, as well as a care site, on farmland it owns south of Links Road in Gorleston.
The site lies on top of a busy roundabout at Beacon Park close to the James Paget University Hospital.
Since the application was submitted three years ago, it has faced strong opposition, from both residents and a senior planning officer, with one of the main concerns being "traffic chaos".
National Highways has now echoed those concerns - and recommended that Great Yarmouth Borough Council do not grant planning permission to the scheme.
The A47 roundabout at Links Road in Gorleston. (Image: Google Maps)
They said that a proposed toucan crossing on Links Road appeared to be too close to the nearby A47 roundabout and could lead to vehicles queueing back to the junction.
Additionally, in June, a retail impact assessment carried out on behalf of the borough council said that granting planning permission for the site could have a material impact on the chances of securing a grocery retail operator for a development at Beacon Park.
The county council withdrew their application on July 5.
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The plan had included two access roads from Links Road, two toucan crossings and a shared pedestrian and cycle track to the northern side of Links Road to the junction of Mariners Compass.
The site has been allocated for up to 500 homes, with the withdrawn bid relating to phase one.
Opinion on the proposed Lidl store was mixed, with some suggesting it would be better sited on Beacon Park.
In 2021, a report from the borough council's strategic planning policy officer said the bid fell short in multiple areas and should be refused.
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