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The UK is still the world leader in offshore wind power, despite an energy firm shelving plans to build a wind farm in the Bristol Channel, Prime Minister David Cameron has said.

RWE Innogy has abandoned plans to create its 240-turbine Atlantic Array between north Devon and Wales.

The German developer said it was "not the right time" for the project.

David Cameron's spokesman said the UK "had installed more offshore wind power than any other nation".

The Atlantic Array was planned in an area of 200 sq km (77 sq miles) about 16.5km (10 miles) from the north Devon coast, 22.5km (14 miles) from south Wales coast and 13.5km (8 miles) from Lundy Island nature reserve.

The turbines would have been 220m (720ft) tall and capable of producing 1,200 megawatts of electricity - enough for up to 900,000 homes, the developer said.

The scheme, which had not yet received the go-ahead, had attracted criticism, with environmentalists worried about its impact on marine wildlife in the Bristol Channel.

RWE said it was being cancelled as it was "not viable... to continue with development in the Bristol Channel Zone" because of "technological challenges and market conditions".

However, ³ÉÈË¿ìÊÖ South West political editor Martyn Oates said sources told the ³ÉÈË¿ìÊÖ it would "not go ahead because of problems in financing it".

The Department of Energy and Climate Change (DECC) had initially told the ³ÉÈË¿ìÊÖ the scrapping of the scheme was a matter for the developer.

After RWE's announcement, Labour's Shadow Energy and Climate Change Minister, Julie Elliott, said Mr Cameron's failure to support clean energy was "putting vital new investment at risk and jeopardising the country's future energy security.

She said: "It might keep Tory backbenchers happy when David Cameron says he wants to 'drop the green crap', but the government's attacks on green energy are scaring away firms that want to invest and create jobs in Britain."

She was referring in which a senior Tory source said Mr Cameron "is going No 10 saying 'We've got to get rid of all this green crap'" in reference to scrapping environmental levies on energy bills".

However, Mr Cameron's spokesman said there had been £29bn of private investment in renewable energy since 2010.

The DECC also told the ³ÉÈË¿ìÊÖ: "The UK still expects to deploy significant amounts of offshore wind by 2020 and we remain well placed to meet our 2020 renewable energy target."

But Tim Jones, of the Devon and Cornwall Business Council, said the cancellation was "absolutely a massive body blow for Devon".

He said: "We were looking at hundreds of jobs during construction and about 200 jobs for 25 years looking after it when it was built.

"We're going to have to work to repair the economic loss we have suffered."

Critics of the project said they were "absolutely delighted" it had been cancelled.

Derek Green, manager of Lundy Island, near the proposed project site, said there were concerns the turbines would "overwhelm and dwarf" everything else in the area.

Steve Crowther, from local campaign group Slay the Array, said: "This was clearly an ill-conceived scheme in completely the wrong place."

Ian Button, who owns a caravan park on the Gower Peninsula, Swansea, overlooking the channel, said going ahead with the array would have had a "huge impact" on his business and the site would have "lost a view that's been here for generations".