The company was due in the High Court on Tuesday to begin a full judicial review of the board’s Jun 2011 decision in relation to the development.
The case was expected to run for at least five days.
However, in a shock move last night, the company’s legal representatives told the harbour residents’ legal team it was pulling out of the legal challenge.
Harbour residents group, Chase, which has been fighting the project for 11 years, welcomed the move.
They urged the company to “do the decent thing” and “finally walk away” from the project.
However, the long-running saga looks set to drag on.
It has now emerged that Indaver is engaged in pre-application talks with An Bord Pleanála under its strategic infrastructure process, which raises the possibility that the company could lodge its third planning application for an incinerator at the same site.