Gafoor Pure Halal in Preston had asked the council if it could extend its working hours on up to 18 weekends a year close to religious or festival days.
But residents living near the plant in Fletcher Road, who already claim they have to put up with strong odours during the week, have lodged an objection saying weekends and bank holidays are the only break they get from the nuisance.
And environmental health chiefs have also opposed the application saying Sundays and bank holidays are "still the most precious days of the week for residents - it is expected these days should be kept as respite for any potential disturbance."
Gafoor, who built the plant 20 years ago after winning an appeal against council refusal, wanted the lifting of a condition imposed by a Government inspector in 2001 banning working on Sundays and bank holidays.
Now the company, which aims to process up to one million chickens a week, has withdrawn its application before it has even been debated by councillors. It is unclear if Gafoor has abandoned the idea or intends to return with an amended version.
Gafoor says that closing down the plant for a long weekend can have a major effect on its business.
The company is currently closed on a Saturday and so the inability to work on Sundays and bank holidays means poultry cannot be processed for three consecutive days, meaning welfare issues for the birds.
"The supply, transportation, slaughter and processing of chicken is now a seven-day-a-week industry which is required to meet the needs of consumers and where there is a growing requirement for work to take place on Sundays and bank holidays.
"A delay in the transportation from the farms by one or even two days creates problems for the rearing and overall welfare of the birds.”
Gafoor is currently allowed to open from Monday to Saturday (7am-9pm), but only works Monday to Friday.
Chris Hodson, Preston's environmental health manager, said: "For some reason Gafoors have reported that they generally do not work on a Saturday, but are asking for the ability to work on the Sundays of a bank holiday, the Sunday after, as well as working the bank holidays.
"This variation would give 20 plus extra days, but accounts for approximately 18 weekends out of 52 that could be affected.
"Also, if they needed extra production days, then Saturdays would allow 52 extra days. As the current permission allows the use of a Saturday, there is a risk that production could occur seven days a week, allowing for no respite to the residents in the area."
Residents group, Friends of Fishwick and St. Matthews, said the application "wholly disregards the rights of the local residents to a break from the operations.
"We also find it bizarre that the company wishes to work all these holidays but does not exercise its right to work Saturdays.
"Residents all over the area continue to report strong odours that can only be emanating from the factory.
"Please reject this cynical application for the sake of the long-suffering residents."
Gafoor Pure Halal has been approached for a comment.