Fakenham Community Baptist Church wants planning permission to demolish its current place of worship, on Mill Court, to make way for three new houses.
It also wants to convert the church hall and the vicarage into six two-bed flats.
The church has withdrawn its planning application to North Norfolk District Council.
But the Times understands it intends to re-submit it after amending exterior details of the building.
Church leaders say services are full and they have outgrown their current building.
Baptists have obtained planning permission for a larger church, off Clipbush Lane and plan to sell their existing site to fund it once they have planning permission.
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