Campaigners fought the Home Office's controversial proposal to house 750 asylum seekers at surplus MoD land, known as A-Site, between Piddington and Arncott, for more than three years.

Immigration minister Tony McNulty announced the move in Parliament at lunchtime yesterday, but said the Government was now investigating building a secure removal centre for 400 asylum seekers at the site instead.

The county already has a removal centre at Campsfield House in Kidlington.

Since 2001, the Government has spent £18m on the scheme, including buying the land. Cherwell District Council spent in the region of £200,000 to take the matter first to a public inquiry and then through the courts, and Bicester Action Group (BAG) spent £25,000.

BAG co-founder Sue Baxter said she was delighted the Government had seen sense.

She added: "Yes, a detention centre carries its own problems, but it's a situation we can deal with. We could not possibly deal with 750 people walking around the village.

"We've come out of limbo now, it's unbelievable."

Bicester's MP Tony Baldry also welcomed the decision.

He said: "The Government has recognised Bicester is wholly inappropriate for the sort of accommodation centre it was proposing.

"Cherwell District Council and local people are to be congratulated for maintaining a persistent and sustained campaign to make the Government see sense.

"It was highly probable that the Home Office, having spent so much money getting planning permission and having acquired the land at knock-down price from the MoD, would want to use this site for some purpose.

"A secure detention centre will be of a much smaller scale than an accommodation centre and its impact on the community should be minimal.

"It is going to take ministers some time to work out a detailed business case for the Treasury, and clearly during that time it will give me the opportunity to raise any concerns people might have about this detention centre."

Leader of Cherwell District Council, Barry Wood, said: "Naturally this has got to be good news. The district council feels vindicated in its 'String it out as long as possible policy' -- thank goodness it worked.

"As for the future, we have got to see what the proposals are and consider things on their own merits."

Chairman of south area planning Catherine Fulljames, also county council chairman, said she was shocked, but pleasantly surprised by the news.

She added: "It's a relief. The Government has seen sense that there does not need to be this sort of establishment, especially in rural areas -- and it's about time."

Mrs Fulljames also raised questions over the future of Campsfield, which was recently refused planning permission to expand on to Green Belt land, and asked: "Why do we have to have two detention centres in Cherwell?"

The Government was due to close the Kidlington centre several years ago but later changed its mind and decided to keep it open.