An application to open a sex shop in Dymchurch, Kent, has been formally withdrawn after residents and parish councillors opposed the plan.
The shop would have been situated opposite a funfair for children
Shepway District Council had been asked to grant a licence for the premises, which was earmarked for a former children's shop opposite a funfair.
However, Playtime - the company behind the scheme - has now decided to look for premises in a larger town.
Owner Steve Taylor said he had only wanted to offer people a choice.
But residents had felt the choice of location was not suitable for the small seaside town, which attracts families with young children throughout the year.
Parish council chairman Tom Gibbs said the shop would have been situated literally in the centre of the high street directly opposite a children's funfair, and a small indoor area geared to children for leisure use.
Mr Taylor said he had not wanted to cause problems, but while accepting there had been a lot of strong feelings against his proposal, he disputed the fact that locals classed the area as a "children's paradise".
"At the end of the day Dymchurch is an area of decline," he told BBC News Online.
'Bit of fun'
"It may have been a children's paradise about 20 years ago but the half a dozen or so shops there are pretty tacky," he said.
Mr Taylor said he had only wanted to "add a bit of sparkle" to the area, and offer a "bit of fun" for adults in their own home.
"The majority of customers are couples - what's wrong with them buying a toy, or a video or a DVD for use in their own time?"
He disputed the suggestion that sex shops were seedy.
"I think Dymchurch is quite backward in its thinking," he said.