Swiss pesticide Company Syngenta has withdrawn its request for 'emergency measures' which would have seen its neonicotinoid product Cruiser used on up to 200,000ha of oilseed rape and mustard seed in the UK.

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Syngenta's emergency derogation was not discussed in the Cabinet on Tuesday, and so will not go ahead, sources said on Thursday.

The company said it was withdrawing the request due to the lack of time remaining before autumn drilling. Syngenta made its application in May, stipulating that it required a ruling by the end of June for the derogation to be effected. A spokesperson for Bayer CropScience, the other neonicotinoid manufacturer affected by the EU ban, told The Guardian that Bayer had not applied for a derogation because the company did not believe an application would have been successful.

Environmentalists had said the derogation would have undermined efforts to look for sustainable alternatives to neonicotinoids – the most widely used pesticide group worldwide – and made a mockery of the EU Commission's partial ban, when this is intended to give bees and other insect pollinators some respite, and see how populations react to restrictions.

However, NFU Vice President Guy Smith said, "The NFU is disappointed that Syngenta has decided to withdraw its application for the emergency use of Cruiser. It is very frustrating that, after the Advisory Committee on Pesticides had indicated that the conditions for approval had been met, it was not possible for a decision to be made in time for Syngenta to prepare seeds for this year's planting."

Smith suggested that "The whole issue has been heavily politicised and manipulated with misinformation by campaign groups with their own agenda against pesticide use, without concern for the consequences for this country's productive capacity or indeed for the potential unintended consequences for bee populations."

When the Commission introduced its two-year restrictions on neonicotinoids last year, in light of mounting evidence that the chemicals pose a health risk to bees, the UK government declared that it rejected the scientific case behind the measures and announced that it would not be pursuing non-binding measures, including restricting neonicotinoid ingredients in gardening products or introducing a scheme to monitor pollinator health during the 'partial ban'.

One day before the Commission ruled on restrictions, a report funded by neonicotinoid manufacturers Syngenta and Bayer CropScience claimed that their products are worth £630 million to British agriculture each year. However, critics suggested that some of the report's figures appeared to have been reached by comparing use of neonicotinoids with using no pest control whatsoever and said its conclusions flew in the face of evidence from Italy, where neonicotinoids were subject to restrictions before the EU-wide measures came into force, and both yields and economic returns from arable farming have been maintained.

In May 2012, researchers from Reading University contributing to the EU STEP project on bee health released a study showing that the economic value placed on insect pollinator activity had been drastically underestimated in previous work. The researchers revealed that the loss of wild insect pollinators would cost the UK £1.8 billion each year, a figure 20 per cent higher than previously estimated.

Reacting to the withdrawal on Friday, Soil Association head of policy Emma Hockridge said, "We are delighted that Syngenta has withdrawn its application to be allowed to use one of the banned neonicotinoids which have been shown to negatively impact bees and other pollinators.

"This is a victory for pollinators and for science – there was no good reason for allowing this derogation and the impact could have been catastrophic. A global assessment on systemic pesticides recently highlighted 800 peer reviewed studies which highlights the risks to birds, earthworms and other pollinators as well as bees."

The four-year study, commissioned by the IUCN, found that systemic insecticides such as neonicotinoids present a threat to life at all levels of ecosystems. The Task Force on Systemic Insecticides warned that their findings "Confirm that they [systemic insecticides] are causing significant damage to a wide range of beneficial invertebrate species and are a key factor in the decline of bees."

Syngenta said it may still apply for a derogation for the 2015-16 season.