PENISTONE Town Council made a dramatic U-turn on its decision to apply for a third time for village green status on the recreation ground at a meeting on Monday.
Councillors voted in favour of revoking the resolution to apply for a village green after talks with Dransfield Properties Ltd, which is behind the supermarket scheme which will partly be built on the show ground.
As a goodwill gesture the company has agreed to give compensatory land it has bought on Schole Avenue to Barnsley council to be retained as open space as part of its £15 million development.
Coun Chris Pilkington said: "The overriding reason for making a village green application was that too much of our precious green space was being eroded. The fact that compensatory land has now been offered, which more than replaces the land lost to the supermarket development, is excellent news.
"We have also extensively researched the issues surrounding village green status and feel there are much better and more effective solutions for protecting the recreation ground - solutions which would ensure that the future of events such as Penistone Show can be safeguarded without restrictions.
"We were never opposed to the town centre regeneration scheme and we look forward to this much-needed development coming to Penistone."
In June the council voted in favour of making the application for village green status for the recreation ground amid concerns over a loss of public open space.
At the next meeting in July it opted to do a survey of members of the public to find out if they wanted a further application at a cost of over £4,000.
This decision was blasted by local business owners and members of the community as a waste of public money.