Norfolk County Council's Cabinet has voted unanimously to terminate its waste contract with Cory Wheelabrator on the grounds of failure to secure satisfactory planning permission.
The decision by the Council's Cabinet followed an Extraordinary Meeting of the Full Council at County Hall, Norwich.
In that meeting members of the council voted 49 to 29 with 1 abstention, to recommend that Cabinet should terminate the contract, which centred on the construction of an energy from waste plant close to King's Lynn in west Norfolk.
In August 2012 the planning application for the plant was called in for determination by the Government.
Following a planning inquiry last year, the Secretary of State for Communities and Local Government, Eric Pickles, said a decision would be made on or before 14 January 2014.
No decision has been announced, and a report recommended termination of the contract to minimise the potential financial impact of continuing delay, rising costs and increasing risks.
When the contract was signed, savings of over £250m were guaranteed over its 23 years, compared to landfill.
The report to Council and Cabinet said that the Secretary of State's failure to make a decision was costing around £140,000 a day, and by June the projected savings would have disappeared.
The escalating cost of continuing delay follows the Government’s decision last November to withdraw Waste Infrastructure grant worth £169m over the lifetime of the contract.
The cost of terminating the contract is estimated to be £30.26m, comprising capped compensation to Cory Wheelabrator of £20.3m, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £8.36m.
Cabinet agreed that these costs should be met through a £19m contingency reserve built up for the purpose, £3m from the council's 2013/14 under spend, and £8m from general reserves.