ALEX Attwood has defended a decision to limit further development on the site of a planned John Lewis store out-side Lisburn.
On Thursday the department store said it was ditching plans for the £150 million shopping centre following a protracted nine-year battle.
It is thought the development at Sprucefield could have created up to 1,500 jobs alongside 19 other new shops.
Environment minister Mr Attwood said he had to "acknowledge the impact of retail proposals on Belfast" as well as other areas.
"The responsibility is to protect existing retail and its thousands of jobs as other retail opportunities emerge," he said.
John Lewis said it had withdrawn its application following the move to restrict the scale of the scheme and because of uncertainty over planning policy.
Earlier this month Mr Attwood said the proposed development - one and a half times the size of the Castlecourt shopping centre in Belfast - would have to be limited to stores dealing in "bulky goods".
A spokesman for John Lewis said Sprucefield was "the only suitable location to develop a new full-line department store in Northern Ireland".
The minister's decision has caused a rift between those for and against large out-of-town developments.
Business groups have backed the decision to limit the scale of the development, which they believe could have a drastic impact on the fortunes of increasingly struggling town and city traders.
Glyn Roberts of the Northern Ireland Independent Retail Trade Association (NIIRTA) said with one-in-four shops across the north lying vacant, an "out of-town John Lewis would have accelerated that decline further".
"NIIRTA would urge Westfield and John Lewis to give serious thought to an alternative town-centre site which will strongly support regeneration efforts and we call upon the executive to establish a multi-departmental task-force to assist them with this process," he said.
Joe Jordan of Belfast Chamber of Trade and Commerce also defended Mr Attwood's decision.
He said the minister was "simply protecting our town centres".
Mr Jordan called on John Lewis to consider the Royal Exchange in Belfast city centre as an alternative site.
"By locating in Belfast, John Lewis would attract further investment into our city and there would be no displacement of employment or retail offer," he said.
However, Lagan Valley MP Jeffrey Donaldson said he now feared John Lewis would instead decide to open in the Republic.
Ulster Unionist MLA Tom Elliott said the decision to pull out was a "major body blow for the Northern Ireland economy".
According to Mr Attwood, a planning inquiry into the Sprucefield application to assess a raft of areas had included the potential impact on other retailers and it was "disappointing that the applicant [John Lewis] had chosen this course".
A planning application for the 500,000 sq ft development was first made in 2004.
It involved a joint venture between the Australian property firm of West-field and Northern Irish developer Snoddons.
Lisburn mayor William Leathem said he was "very annoyed and bitterly disappointed" by the decision.
"The real experts in retail, one of the most successful retailers in the UK, have now literally voted with their feet and opted out of expansion into Northern Ireland," he said. ■ DECISION: Alex Attwood ■ BODY BLOW: Tom Elliott