Dumfries and Galloway has decided against pursuing a green freeport at Cairnryan, after a vote to exclude P&O Ferries from its proposals.
The local authority decided that the beleaguered ferry company had no place in its plans, after it sacked 800 staff earlier this year.
A report from its Economy and Resources Committee advised the councillors to not continue with its bid, but rather "consider future opportunities with Scottish Government for the west of the region, such as Enterprise Zone or similar status".
It cited the loss of a commercial partner and the limited area for development as reasons to drop out of the running for one of Scotland's new freeports.
The UK Government announced eight such sites in England last year, which will benefit from special tax, duty and customs rules.
After initially rejecting the idea, the Scottish Government is now pursuing a 'green' version, with additional standards around jobs and climate targets - and two locations will be chosen later this year.
Dumfries and Galloway Council heard last year how securing the status for Cairnryan - which has both P&O and Stena Line ferry terminals - could unlock investment of around £25m.
However, an emergency motion subsequently expressed the local authority's disgust at the mass sackings at P&O and its decision to bring in agency workers.
Demonstrations have been held at the ferry port since then, with the latest seeing RMT union organise another blockade on Monday afternoon.
The had allocated £120,000 towards the plans, but only £20,000 has been spent with advisers EY so far.
The professional services firm's feedback stated that while work is yet to be completed, "the ongoing analysis highlights that the project is unlikely to have a competitive, viable bid for the Scottish green freeport proposal".
The report said the loss of P&O and its expertise in the field had played a part in its recommendation to abandon the bid, while the limited site area and the short timeframe to develop the bid were also cited.
Remaining partners Stena and South of Scotland Enterprise are still committed to developing the economy in the area, but by other means.
The report added: "The previous strength of our proposed bid was not based upon the customs zone and tariff inversion, but on developing a cluster approach to the renewables sector, aligning research and development with energy creation and provision to achieve a net zero region.
"We consider that the development of an Enterprise Zone can better achieve the aims and aspirations outlined in the plan."
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