But the battle over the future of genetically modified food is far from over.

The pioneering multinational company said it hopes to reintroduce its latest biotech crop within four to eight years once it gains wider acceptance.

But opponents say they want governments to raise the regulatory barriers in the meantime.

"We're so excited. Wheat is such a staple. It's on everyone's dinner table. For once we saw how consumer rejection can have an impact," said Nadege Adam, a spokesperson for the Council of Canadians, an Ottawa-based consumer lobby group.

"This is a huge victory," said Pat Venditti, a spokesperson for Greenpeace Canada. "Everyone assumed Monsanto was going ahead with this."

Monsanto denied pressure groups had anything to do with its decision, saying it was a business decision. The company said it decided to defer all further efforts to introduce Roundup Ready wheat after extensive consultation with customers in the wheat industry.

The market for spring wheat has shrunk by 25 per cent since Monsanto began developing the herbicide resistant strain in 1997 as farmers switched to more profitable crops, the company noted.

The company said it plans to focus on developing new traits for genetically engineered crops that already have wide acceptance, such as corn, canola and cotton.

"The business opportunities with Roundup Ready spring wheat are less attractive relative to Monsanto's other commercial priorities," said Carl Casale, executive vice-president of the St. Louis, Mo.-based multinational.

The Canadian Wheat Board, the world's largest marketing agency for wheat and barley, was among the Monsanto customers opposed to the product.

Its members stood to lose 87 per cent of their market as a growing number of countries, including Japan and the United Kingdom, demanded assurances the genetically modified crop wouldn't contaminate conventional supplies, something current technology can't supply, board spokesperson Louise Waldman said.

Canadian farmers sell $4 billion to $6 billion worth of wheat and barley each year and meet 20 per cent of the world's demand.

Unlike Roundup Ready canola and corn, which lower farmers' costs by reducing their use of chemical sprays, there was no economic benefit to adopting Roundup Ready wheat, said Waldman.

Monsanto had planned to launch the modified wheat in North America, which is the world's largest exporter. But U.S. wheat farmers were meeting similar opposition from customers.

The world leader in genetically altered seeds says it could re-introduce Roundup Ready wheat within four to eight years in conjunction with other, more attractive biotech traits under development, such as drought resistance.

Canada's wheat farmers aren't opposed to genetically altered seeds, the wheat board said, but want to see more benefits and more advances in technology that allow farmers to segregate modified crops from conventional ones.

In the meantime, critics of biotech engineering say now that genetically altered wheat is no longer an imminent threat, they can devote more resources to pressing Ottawa to toughen up the approval process.

"We feel genetically engineered crops should go through the same system that's used to introduce new drugs," said Stewart Wells, president of the National Farmers Union.

"There may be a place for some traits in some plants," added Wells, an organic farmer in Swift Current, Sask. "But we need to slow down and treat each cased individually."

Greenpeace wants mandatory labelling of food that contains genetically modified ingredients so that consumers can make their own choice. Surveys by the Council of Canadians show 83 per cent of consumers want a moratorium on GM food.

But a Monsanto spokesperson said its own studies show consumers aren't worried about it. "Did the actions of a few anti-biotech groups influence our decision? Absolutely not," said Monsanto Canada spokesperson Trish Jordan.

"This was a business decision based on the economics of bringing this production to market versus other crops where we have massive acceptance."

Canada's grocery retailers were reluctant to comment on the latest developments yesterday. The Canadian Council of Grocery Distributors said genetic modification had become a huge problem for European retailers. That's why it supported voluntary labelling of genetically engineered foods in Canada.

Loblaw Cos. Ltd., the country's largest supermarket chain, said it has addressed demand for GM-free food through its line of President's Choice organic products.

Monsanto said delayed development of the modified wheat would have no material effect on its earnings this year. The seed was still two to three years' away from production, even if it met all regulatory approvals, a spokesperson said later.