The future of a controversial scheme to build a huge supermarket and block of flats on the edge of a nature reserve has been thrown into question after Sainsbury’s confirmed it was no longer involved in the project.

Stoke Newington campaign group Stokey Local, which has fought the Wilmer Place development plans for four years, was told that its legal challenge had reached its final conclusion last week – after a judge threw out its appeal against the dismissal of a second judicial review into Hackney Council’s approval of the scheme.

But in a shock twist Sainsbury’s, which planned to open the supermarket, has confirmed this week it is no longer involved in the scheme and developer Newmark Properties declined to comment on its future.

Plans to develop the site, which included 53 luxury flats, have been met with vehement opposition from the community and Stokey Local over fears the project will blight the landscape as well as damaging heritage, trade and ecology in the adjoining Abney Park cemetery and nature reserve.

The project has also been criticised for offering only nine “affordable” flats.

In a statement, Stokey Local spokesman, Nick Perry, said: “Even though we’ve lost this specific battle, our continued tenacity and vigilance could still win the war. Things have changed a lot in the four years since we started our campaign, and supermarkets are no longer quite as enthusiastic about opening big stores as they used to be.

“Today Sainsbury’s confirmed it no longer has a lease on the site – which could mean the development is shelved after all. If we’ve waited our opponents out until they change their minds, that’s a massive victory.

“And we’ve achieved a lot anyway, by bringing the community together, revealing the injustices of the planning process and giving local people, businesses and wildlife vital extra years without this harmful development on their doorstep.”

A Sainsbury’s spokesman said: “We assume the developer will continue with their plans for a housing and retail scheme.

“In the meantime we plan to focus support on our thriving Sainsbury’s Local in Stoke Newington High Street, which remains extremely popular with our customers.”