Campaigners have been targetting Big Food Group stores

The company - which has its headquarters on Deeside - was facing increasing pressure from campaigners to drop its �12m demands.

The debt dates back to 1976, when Guyana nationalised huge sugar plantations, owned then by Booker, which is now part of the Big Food Group.

Guyana, one of the world's poorest countries, was unable to pay the compensation it promised.

Campaigners urging the BFG to drop its claims had planned a series of protests, including at its Deeside offices, on Tuesday.

The decision has been welcomed by the Jubilee debt campaign, which demands wealthy western governments and companies reduce the burden of debt on poorer countries.

Guyana is one of the world's poorest countries

A spokesman for the BFG said the matter had been reviewed in the context of the firm's "corporate and social responsibility".

"We believe the interests of both our company and those of the people of Guyana are best served by not proceeding," said Corporate Communications Director David Sawday.

"We are requesting that these outstanding funds be channelled into projects that will directly benefit the people of Guyana," he added.

The claim was due to be the subject of an arbitration hearing by an international court which settles investment disputes later this year.

A series of protests against the Big Food Group had been planned for Tuesday, including at its firm's headquarters in Deeside.