Plans for security firm G4S to build and part-run a police station in Lincolnshire have been put on hold.
Two-thirds of the civilian staff working for Lincolnshire Police transferred to G4S in April as part of a ten-year outsourcing contract.
The police station was due to built by G4S in addition to the contract.
But the idea was heavily criticised, and any decision will now be made by a police and crime commissioner after election in November.
Save Our Local Village Environment (Solve), which campaigned against the plans, believes a police and crime commissioner will be likely to oppose the plans, particularly given the criticism of the way G4S handled Olympic security.
Sue Turnbull, a member of SOLVE, said: "We are very pleased that it would appear that common sense has prevailed, and it looks as if it is not a project that will proceed.
"We are still in the hands of the [prospective] police and crime commissioners at the end of the day, but hopefully they too will see it is a project that will not be proceeded with."
Replacing central station
The police station, described as a "custody and deployment base", was due to be built on undeveloped land at Lincolnshire Police's headquarters.
The headquarters are next to the village of Nettleham, near Lincoln, and the main police station in Lincoln would have closed as part of the plans.
Solve distributed a statement after meeting with senior police officers.
The statement said: "A new police and crime commissioner (PCC) will be appointed for the county in November 2012 to replace the existing police authority and it is felt that it would be quite wrong to take precipitous action now which might seriously impede freedom of action at a later date.
"In practice this means that it is highly unlikely any decision will be reached in the current year and the likelihood of finance being made available for such projects is now so low it is improbable that new police facilities in Nettleham or Lincoln will be built for the foreseeable future."
A spokesperson for Lincolnshire Police said the force was unable to comment, but said the information in the statement was correct.
A spokesperson for G4S declined to comment.
Alan Hardwick, spokesperson for Lincolnshire Police Authority, which will not exist after the election of a police and crime commissioner, said: "It will be left to the commissioner to make the final decision, which may well be 'no'."