The Danish firm supplies 40% of the offshore turbines used worldwide, and had been granted planning permission for the site at Sheerness Dock last month.
A spokesman for Vestas said: “We want a good pipeline of orders before we advance further and we do not have that at this point in time.”
Vestas’ decision was deemed a “bitter disappointment” by Swale Borough Council, which in a statement said: “We can only speculate on the reasons, but we know that Vestas has recently had some major management changes and has been facing some big internal financial challenges.”
Laura Sandys, conservative MP for South Thanet, also commented: “Vestas’ decision will have been a commercial one but it also suggests a lack of confidence within the industry over the government’s commitment to the green economy and crucially offshore wind.
“The market needs certainty from government if it is to deliver the thousands of jobs and billions of pounds of investment that could secure our economic recovery.”
Vestas said it is working on the development of a number of wind projects in the UK. The company runs facilities on the Isle of Wight specialised in R&D for the wind turbine industry.