Contractors who were due to fence off part of the village green at the Lizard this month have pulled out of the job fearing a "hostile" reaction from local residents.
DA Giles, based at Coverack Bridges, near Helston, had submitted a tender for erecting wooden posts around the green, which had been accepted by Landewednack parish council.
But in a letter sent to the council last week, the firm said it was withdrawing its tender.
The letter stated: "We feel that the anticipated hostile behaviour of some of the local residents could involve us in a potentially difficult local political situation. We therefore wish to withdraw our tender. We are a local company to the Lizard and have many contracts within that community."
The controversial decision to fence off part of the small green was taken by the parish council following a referendum earlier this year in which residents narrowly voted in favour of stopping parking on the green.
The council decided to leave a small area accommodating around a dozen cars, but fence off the rest of the green, creating an open space for the enjoyment of locals and visitors alike.
Tenders were invited for the work, which had to be completed before the end of April, and DA Giles, who recently carried out work to the surface of the large green, were appointed for the job.
Contacted by the Packet this week, owner Derek Giles said he did not wish to make any further comment.
The issue of closing the green has aroused controversy within the community for years. Some local traders and residents strongly oppose the move, claiming the resulting loss of parking would have a devastating impact on businesses in the village.
Others maintain there is enough parking on the adjacent large green, which the council plans to improve, and say restoring part of the small green to its intended use would benefit the community as a whole.
Council chairman Peter Walker said the issue was "in limbo" because the authority was not due to meet again until after the local council elections at the start of May.
He had put the matter back on the agenda for the next meeting and it would be up to the new council whether or not the green was closed.
"It should still happen because it was a democratically taken decision," he said. "It is in the hands of the new council now."
Council colleague Neville Green, who unlike Mr Walker is standing for re-election next month, added that he was "very disappointed" that DA Giles had pulled out at the last minute.
He said the letter from the firm had been displayed on the village noticeboard so that residents were made aware of the situation.
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