According to a report in the Townsville Bulletin, developer Grant McOmish - who is responsible for selling the proposed site to DFO parent group Austexx - has accused the Townsville Council of deliberately delaying a planning decision to the point where a contract on the sale expired.
"The reality is there's a DFO proposed, a lot of jobs and economic stimulus to the city and they are jobs we are not going to get in our community," he told the newspaper.
However the council denied McOmish's claims it had delayed the approval process and argued McOmish was trying to "sneak the application through council" and avoid public consultation.
The council said the Department of Main Roads had warned the proposal for the centre would cause traffic chaos and this had had to be investigated.
The decision follows Stockland Trust confirming an indefinite halt to redevelop its Aitkenvale shopping centre to accommodation a Myer store.
DFO already runs centres in Homebush, Essendon, Canberra, Spencer and Brisbane with tenants including Peter Alexander, Jacqui E, Lorna Jane, Cue, Portmans, Just Jeans, Jay Jays and Industrie.