German renewable energy giant, RWE has said that it is cancelling plan to develop a giant offshore wind farm project that was to power around a million houses in the UK.

RWE said that it has decided to scrap the £4billion Atlantic Array project, under which the company was planning to deploy 240 turbines in the Bristol Channel. The company said that the technical challenges and spiralling costs.

However, others have blamed the uncertain regulatory environment in the UK for forcing the company to cancel its project and for discouraging investment in renewable energy sector. The Prime Minister of the UK, David Cameron has indicated that the country might roll back green taxes. The uncertain signals form the government has created confusion in the industry and firms are waiting for more clarity before making investments.

There are 22 offshore wind farms in operation, supplying power for 2.5million homes in the country. Experts have said that no large project is expected to go ahead as firms are concerned over the government's inconsistent approach towards the industry.