BBC News' Greg Wood reports

It is being seen as a major blow to biotechnology in Britain as the trust says it will now consider taking the development overseas.

The original plans for the park would have seen a 40,000-square-metre extension to the genE-hunting Sanger research centre, at Hinxton, just a few miles to the south of the university city.

The Sanger Centre is contributing one third of all the international work to map the estimated 100,000 genes in the human body. It was envisaged that start-up companies would use that raw data to design the next generation of super drugs.

Star companies

But the plans were thrown out by the UK's Environment Secretary, Deputy Prime Minister, John Prescott because they involved building on currently undeveloped fields.

There are tight planning restrictions south of Cambridge

He, together with local government officials, had objected to the scale of the project and had asked the trust to scale down the plans.

Wellcome said that was unacceptable.

"This would have attracted in the order of 1,000 new jobs, and perhaps several other start-up companies that then would have developed to the next SmithKline Beecham or Glaxo-Wellcome," said Dr Mike Dexter, the trust's director.

"If it goes out of the UK, it would be a tremendous loss for the country."

Fighting disease

This view was reflected at the nearby Babraham Institute which is already using genetic information to develop new pharmaceuticals for the treatment of cancer and other diseases.

"There is evidence that Germany has overtaken us in the last year for the number of start-up companies," said the institute's director, Dr Richard Dyer. "We were a clear second to the United States, and as the competition mounts, that position will be hard to maintain."

However, South Cambridgeshire is subject to very tough planning controls. It is in the so-called "greenbelt" around Cambridge which restricts the number and type of developments which are permitted to go ahead. Green campaigners argue that public transport and housing could not support the influx of a thousand new people.

To bring another 1,000 people into this area would create an insuperable problem," said Lawrence Wragg from the Council for the Protection of Rural England. "One thousand people means probably another 1,000 houses, plus the people that would then provide them with essential services."