Vacuum cleaner pioneer Sir James Dyson has urged would-be investors not to give up on Bath despite the failure of his plans for a £56 million school in the city.

The millionaire businessman finally called time on his Dyson School of Design Innovation this week after the Government which had asked him to launch the project pulled the plug on its funding.

But Sir James stressed that civic leaders in Bath had been supportive – and that national politicians had been to blame.

The scheme for the old Stothert and Pitt Newark Works site at South Quays had faced the costly delay of a public inquiry scheduled to start in January.

The school, which had originally been due to open this autumn, would not have accepted its first students until the year 2012.

Educational charity the James Dyson Foundation had already ploughed £3.5 million of its money into planning the school and had spent four years on developing the project.

The school would have taught cutting edge engineering to teenagers from all over the south west, with £12.5 million of funding from the foundation as well as financial backing from other industrial giants.

It was also banking on funding from the Government, orginally pledged through the Learning and Skills Council, for the school to solve a major national skills gap.

But the Department for Innovation, Universities and Skills this week decided to fund an academy backed by Dragon’s Den businessman Peter Jones instead.

Sir James, who began his engineering career with city firm Rotork, had been keen to build the school in Bath.

Bath and North East Somerset Council, which owns the land, had backed the school but, because of opposition from the Environment Agency to the use of the Newark Works site on flood prevention grounds, the final decision rested with local government minister Baroness Andrews.

In August, she began sounding the death knell for the school by calling the public inquiry – a process completed by the funding decision.

In an exclusive interview with the Chronicle - which broke news of his decision on its website thisisbath.co.uk - Sir James said he was disappointed for Bath.

But he said: “This should not put anyone off Bath.

“It wasn’t local bureaucracy – it was central Government that killed it.

“I quite understand the need for a full democratic process, and I think we had that.

“But it was wrong to have a public inquiry which would have gone over old ground.”

He added: “Faced with a planning inquiry and this Government’s recent rejection of our funding proposal, we have no choice but to abandon the plans for the school. We deeply regret having to give up on the opportunity to provide an exciting education for our young people.”

In August, Sir James had written to Prime Minister Gordon Brown – attaching a copy of a Chronicle leader column backing his school – to ask for help.

He pointed out education ministers had been delighted with his plans – but that another minister had dealt the scheme a potentially fatal blow.

The letter concluded: “I was invited by Government to do something about our chronic lack of engineers – something that I truly believe in; yet it is Government that has killed off this project.”

Sir James received an acknowledgement from number 10 but has yet to get a proper reply to the letter.

He told the Chronicle: “I’m very disappointed that central Government doesn’t feel the need to support engineering and this school in Bath.

“The Government says one thing and does another.

“They asked us to do this school and then didn’t give us the money for it. It’s difficult to know which way to turn.”

He is now considering plans to offer engineering education via the internet.

Bath MP Don Foster, who spoke to Sir James yesterday, said he was “bitterly disappointed” by the collapse of the scheme.

“The scheme would have been of great benefit to the city.”

A B&NES Council spokesman said the authority had agreed to approve the Dyson scheme “because of the significant benefits it would bring to the area.”

“The council also agreed to sell the site at below alternative market value to help progress the project.

“The council is disappointed the Dyson Academy will not now go ahead and understands the significant challenge presented by dealing with the 12 Government departments or agencies involved in the project.”

“The academy would have brought significant benefits for Bath, including quality of education in the district for our children and young people.

“The council will continue to maintain contact with Sir James Dyson and will be available to discuss any better proposals that may arise.”

The spokesman said it was “too early to speculate” on the future of the site.

The foundation architect’s latest designs incorporated part of the facade of the Stothert and Pitt Newark Works.

It had looked at a string of sites in Bath and been wooed by civic leaders in places such as Swindon and as far afield as the USA.

Sir James insisted that the South Quays site was the only one suitable because he wanted to be at the cultural heart of the city, encouraging people to drop into the school’s foyer to view exhibitions and have coffee.

Conservation groups have been divided by the Dyson scheme.

All three major groups in the city backed the concept of the school, but only the Bath Preservation Trust accepted its presence at the Stothert and Pitt site.

Trust chief executive Caroline Kay said: “We had made objections to some elements of the design treatment of the listed building, but had hoped that these could be resolved by negotiation.

“We believe the loss of the potential offered by such a prestigious scheme is a loss to Bath and young engineers in the area.

We also recognise that B&NES Council now faces a significant problem about the future of the South Quays site, and we look forward to constructive discussion with them about plans to address this.”

The Bath Heritage Watchdog group, set up by people unhappy with the trust’s stance on Churchill House, objected to the choice of site.

Spokesman Jim Warren said of Sir James: “The fact that he spent over £3 million trying to force through a development that he knew three years ago was contrary to planning legislation is Dyson's own fault. At least he now knows that lobbying the Prime Minister still does not overcome the law of the land. And realistically the Government skills academy initiative couldn't possibly fund a share of something that ignored Government guidlines, and Dyson should have worked that out for himself too.”

Major Tony Crombie of the Bath Society said it was opposed to the choice of site because the impact on the Newark Works, describing the school’s design as looking like a “stranded spacecraft.”

“We were all for the concept of having a school, but I’m sure it could have been arranged somewhere else.”