Bosses at Taylor Woodrow Construction wanted to use the historic park to construct a 421-space temporary car park for staff working at the £75m re-build project on nearby St Helens Hospital.
However, on Thursday the company issued a statement apologising for causing 'undue anxiety' to residents following a groundswell of opposition to the plans.
A company spokeswoman said: "Taylor Woodrow confirms that it has withdrawn the application for a temporary car park at Sutton Park, St Helens.
"We acknowledge the strength of feeling of some local people and apologise for any undue anxiety.
"We are seeking to identify a temporary parking location to accommodate all the vehicles associated with this major development project of massive benefit to the whole community, whilst minimising impact upon the local neighbourhood.
"We confirm that we will continue to consult and work with the local authority to find an appropriate and suitable site within the area."
Residents were told of the plans on Saturday morning when St Helens Council sent letters to residents overlooking the 104-year-old park. Within days they had drawn up plans to form a community group to fight the proposals and collected a 200-strong petition.