The government has announced plans to sell the former RAF Scampton site on the open market, sparking anger among local leaders.
West Lindsey District Council had been hoping to purchase the historic Lincolnshire airbase, once home to the famous Dambusters squadron.
The council and its development partner had prepared an ambitious £300m regeneration project for the site.
Local officials have warned that this opportunity could now be lost due to the government's decision to seek open market bids.
The government has announced plans to sell the former RAF Scampton site
PAThe proposed development aims to transform the site into a key player in aerospace, satellite and defence technology.
The council claims the project would add £300m to the local economy.
Sally Grindrod-Smith, director of planning and regeneration at the authority, said there was "a clear plan to secure the long-term investment this site needs".
The council's preferred development partner, Scampton Holdings Ltd, remains committed to the project despite the setbacks.
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RAF Scampton was the home of the iconic Dambusters CRWON COPYRIGHTChairman Peter Hewitt told BBC Radio Lincolnshire: "This has been going on for a long time and we've faced many ups and downs."
West Lindsey District Council leader Councillor Trevor Young expressed his disappointment, saying: "I'm disappointed the government hasn't made the right decision, allowing us to progress with our project."
He warned: "We are the only possible buyer. It's not suitable for housing development due to the contamination.
"It would be an absolute disaster if this became a wasted opportunity."
Gainsborough MP Sir Edward Leigh was equally critical, posting on X: "It's madness that the Home Office are putting Scampton on the open market when we have a funded regeneration plan ready to go."
Leigh also accused the government of "trying to cover their tracks because they wasted £64 million and three years trying to house migrants there."
The Home Office defended its decision, stating it 'must comply with market regulation of public land, rather than just handing it to the council'
GettyThe Home Office defended its decision, stating it "must comply with market regulation of public land, rather than just handing it to the council."
In a letter to Sir Leigh, Dame Angela Eagle, minister for border security and asylum, wrote that this approach would "help the Home Office to recoup the costs incurred" following the September 2024 decision not to use the site for asylum accommodation.
The site reportedly ran up costs exceeding £60m between March 2023 and September 2024.
Dame Eagle's letter stated that "the Home Office is committed to continue working with WLDC to progress their interest in the site" while marketing begins.
Local officials emphasised that a public-private partnership is the only viable solution given the site's constraints.
"Given the well-documented constraints such as contamination, heritage concerns, planning, and infrastructure challenges, a public-private partnership is the only realistic way forward," said Sally Grindrod-Smith.
The Home Office confirmed the sale would take place "in line with the process for disposing of Crown land."
