Hunter Downs Water Ltd announced on Thursday it did not have enough buy-in from landowners in its command area between the Waitaki River and Timaru.
The company owns resource consent to use up to 20.5 cumecs (litres per second) of Waitaki River water. The irrigation proposition was launched in 2006 and has been through several incarnations.
In March last year, shares were offered in a $195 million scheme to irrigate 21,000ha and a government development funding grant of $1.37 had been made. By June 2017, the design was shrunk to 12,000ha.
At the end of last year, South Canterbury rich-lister Gary Rooney's offer to buy ''dry shares'' saved the project from being scrapped then.
In April, finance minister Grant Robinson announced Crown Irrigation Investments Ltd's $70 million term debt funding would no longer be available to the scheme. So the company released a new funding proposal in August, asking all prospective investors to reconfirm their commitment.
Chairman Andrew Fraser said yesterday ''a significant drop-off in support'' meant the scheme could not proceed.
It was not all about intensifying land use and converting to dairying, but rather relieving pressure on existing water takes, decreasing reliance on surface water extractions, and using the plentiful Waitaki River resource, he said.
The company would try to secure the water consent by working with Meridian Energy, which had helped to gain it more than 10 years ago.
''We will utilise the consent to protect and enhance our natural environment, including the augmentation of Lake Wainono.''
Company spokeswoman Stacey Scott told Central Rural Life the farmers who were committed to the irrigation scheme were ''very disappointed''.
The first share instalments they had paid would be refunded and everything would be shut down during the next month, Mrs Scott said.
Then the company would schedule conversations with Environment Canterbury and the community about the Wainono Lagoon.
The September 25 board meeting where decision was made was ''very sombre and gutting'', she said.
''There was more blood and sweat than tears.''
She believed there would be regrets in years to come that the scheme did not go ahead. But without widespread support, the risk and commitment could not be loaded on to the willing few.
''We've just got to move on.''
Irrigation New Zealand chief executive Andrew Curtis said the scheme, which had received more than $4 million in investment, could have boosted the Waimate economy, created jobs, improved standards of living, and helped resolve water quality problems.
Forest and Bird New Zealand Canterbury-West Coast regional manager Nicky Snoyink said abandoning the scheme was an ''awesome'' decision.
''Congratulations to the South Canterbury farmers.
''It's liberated future generations from the burden of the debt. They will be free to farm more to natural conditions.''
Augmentation of poor-quality water bodies like the Wainono Lagoon was unproven and Forest and Bird wanted to see evidence before supporting it, Ms Snoyink said.
