Far North Mayor John Carter is furious a hopes of a pulp and timber mill in Kaikohe - and 200 new jobs - have been killed.
The proposal for using cheap geothermal power was a cornerstone of the government's Economic Action Plan for Northland. Economic Minister Steven Joyce supported it.
The Ministry of Primary Industries and Trade and Industry have decided to go no further with a feasibility study because of uncertainty over national grid charges.
Mr Carter said the ministries should have waited for an Electricity Authority policy update due today.
He said his council and Northland's regional development agency had two major investors interested in the mill project.
The Far North mayor said it was as if the government's left hand did not know what the right hand was doing.
He would take the matter up with the ministers.
