Campaigners in Weston Otmoor said they were relieved by the decision
Campaigners against an eco-town in Weston Otmoor, Oxfordshire, are celebrating after the plans were dropped by the government.
Members of the Weston Front group waged a 21-month battle against proposals for 15,000 new homes.
North west Bicester has been named by the government as an alternative site for 5,000 eco-homes.
It was proposed by Cherwell District Council and backed by campaigners as a more suitable location.
Government support was also given, in principle, to sites in Rackheath, Norfolk; Whitehill Bordon, East Hampshire; and the China Clay Community scheme near St Austell, Cornwall.
Construction work is due to start on the eco-town projects in 2016, subject to them receiving planning permission from their local authorities.
They are intended to meet housing needs and tackle climate change, but have met controversy and opposition from some communities.
The council said 15,000 homes would have been a blot on the landscape
Tony Henman, from Weston Front, said: "Gordon Brown finally seems to have seen sense."
Mr Henman, father of the tennis player Tim Henman, said in 21 months Weston Front had held more than 200 public meetings about the eco-town next to Woodsides Meadow Nature Reserve.
Mr Henman added: "The whole area has been blighted for a considerable period of time.
"People have been unable to move jobs and sell their house because of this, I know people who have been unable to get divorced as they can't move house."
He said while he accepted the need for more housing, it had to be in the right place.
Cherwell District Council leader Barry Wood said: "If that town had gone ahead that would have drained resources out of Bicester and out of Kidlington. I can't tell you how much this is good news."
Regarding the alternative site, he said: "It's going to mean a lot of government investment and a lot of government attention on the town of Bicester and we are looking to improve the whole quality of life for that town."
The housing minister John Healey said: "This is the one that, along with the other three sites, meets the really tough green standards we are setting out in the new guidance today and it's also the one where there is strong local support and a very good chance of it being developed and delivered quickly."