An international company has withdrawn plans to set up a recycling depot in the Christchurch suburb of Papanui and is looking for another site.
Ceres Environmental had proposed a possible site for the depot in Cranford Street, prompting an angry response from residents who said it was too close to homes and schools, and were worried about increased truck movements and the health effects of dust.
Senior project manager Mark Frame says negotiations are underway to secure an alternative site close to the central business district but is not specifying the location.
Mr Frame says the company will inform nearby residents once a location is found.
"As part of the Resource Management Act there is no way of being able to secretly sneak it in the back door ... or pull the wool over someone's eyes."
Mr Frame says the plant will help reduce the cost of removing earthquake debris by separating out materials for recycling, and cut down on dumping fees.
He says up to 60% of the cost of quake demolition is council tip fees which will be paid out of insurance payouts, and the recycling depot could substantially reduce that liability.
A spokesperson for the community group opposed to the plant says they will continue to raise concerns as long as Ceres continues to consider sites close to residential areas.
David Moorhouse is calling on the Government to provide leadership on the issue.
A community meeting to discuss the problem will be held on Thursday night.