Tregaron Secondary School will have about 313 pupils in September
A proposal to build a super-school for pupils aged three to 19 to replace eight schools in the Tregaron area has been postponed for at least four years.
Ceredigion Council has decided not to submit the plan for Welsh Assembly Government (WAG) funding by 2012.
The local authority now intends to submit the project for the next funding round in 2015.
The council's leader said the plan had not been submitted because its sustainability had been questioned.
Ceredigion Council's cabinet had supported the idea after already agreeing a similar scheme in Llandysul.
A report said secondary schools in Ceredigion were not up to standard, and cost per pupil figures in the catchment areas were among the highest in Wales.
The Tregaron project was supported by the council's cabinet in July 2010.
At the time, the council said all seven primary schools in the Tregaron area had fewer than 90 pupils and have 102 surplus spaces - 25% of the total capacity.
The new multi-site school would include a focal point at Tregaron and a three-11 federal school at Pontrhydfendiagaid and another three-11 federal school to the west of Tregaron.
The plans involved closing Tregaron Secondary School and Tregaron, Lledrod, Bronnant, Llangeitho, Penwuch, Pontrhydfendiagaid and Llanddewi Brefi primary schools.
A WAG spokesman said: "Local authorities have submitted their Strategic Outline Programmes (SOP) which are now being considered.
"Decisions on these are expected in the summer.
"Llandysul is part of this process but Tregaron wasn't included in the Strategic Outline Programme."
Tregaron Secondary School has a projected school register of 313 pupils in September 2011, with about 40 pupils entering year 12 and 30 entering year 13.
Ceredigion Council's leader, Cllr Keith Evans, said the local authority had decided to postpone the plan to build the new school in Tregaron because WAG officials had questioned the sustainability of the project.
He added: "We are not walking away from the project but we have to answer the questions that have been raised.
"What is important now is that the people of Tregaron pull together to ensure the success of the project in the future."
Llangeitho's county councillor, David Evans, said he was disappointed that the local authority had put the plan on hold.
"This is a great pity because I believe the decision is not fair on the people of the Tregaron area."