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A company hired to boost the fortunes of a Powys town is pulling out of the project, blaming "malicious and personal attacks".

Revive & Thrive, owned by Conservative county councillor Mark Barnes, was drawing up plans for a Business Improvement District (BID) in Newtown.

Labour accused the Tories of awarding "contracts for cronies" and a Facebook group was set up to oppose the project.

The firm accused Powys County Council of a lack of support over the row.

It still intends to press ahead with a separate plan for a BID in Brecon.

The company has already run similar schemes in England, where town and city centre businesses pay a levy to fund joint activities such as marketing and promotion.

Questions were raised last year about Coun Barnes's firm being awarded the contract for both BIDs in Powys.

He answered that criticism by saying he would stay away from the day-to-day running of the schemes.

However, a Facebook group opposing the Newtown project was set up, with contributors voicing concerns about possible conflicts of interest.

As the owner of a used car dealership in Newtown, Coun Barnes could be a future investor and levy payer, according to the Local Democracy Reporting Service.

In a statement, Revive & Thrive accused members of the Facebook group of hiding behind "a veil of anonymity" to attack the company and other business owners, and declining an invitation to debate the issues publicly.

The firm also said the county council was "seemingly content to let damaging conversations in the town run their course".

A spokesperson for the council said: "We can confirm that Revive & Thrive have offered their resignation from the Newtown BID process.

"Their decision will be discussed by a meeting of the BID steering group later this week."

The "No Newtown BID" Facebook group denied making slanderous and defamatory statements.

"Due to the clear conflicts of interest, the contracts should never have been awarded to Revive & Thrive," it said.