The Middlemore Residents Association has admitted defeat for now in its in bid to bring a free school to the Daventry estate.
Part of the plans for Middlemore were to have a primary school when the estate was developed.
However, while Daventry District Council (DDC) provided the land for the school, Northamptonshire County Council said at the time there was no demand for a new primary school.
This led to the association looking for sponsors for a free school on Middlemore.
Initially E-ACT, which runs two academies in the town, was chosen – but after it was given notice to improve, the residents found out their bid with E-ACT as a sponsor was likely to be unsuccessful.
The group then worked with the David Ross Education Trust (DRET), which runs three academies in the district, before DRET was told by the Department of Education to concentrate on existing academies rather than build new ones.
DDC has also decided to build a school on new Monksmoor estate, which is currently under construction off Welton Road. This decision has left the Middlemore association with little choice but to declare their bid over.
One of the residents campaigning for the school, Tamlyn Coleman, said: “We are all obviously very disappointed at having to take this decision.
“We’ve all worked so very hard on trying to bring a much-needed school to Middlemore.
“DDC has decided to develop a school on a building site – which Monksmoor will be for the next few years – rather than on a site which is ready made for a school. We need new school places now, not to have to wait until the school at Monksmoor has been built.”
Karen Tweedale, from the residents association, said: “Naturally I am incredibly disappointed with the outcome, the residents of Middlemore have been well and truly let down by the system once again.”
There is a small chance a school could go-ahead but residents are now waiting for DDC to make the next move.
Mr Coleman added: “We are hearing the plans for the Monksmoor school will be submitted in September. If it is not, we might be able to look for a sponsor and progress the plans. If the plans do get submitted then it would severely weaken the case for a school on Middlemore.”