The Upper House voted yesterday afternoon 22-18 in favour of a revocation motion to suspend construction on Melbourne’s West Gate Tunnel.

A $60 million precast concrete factory in Benalla was going to supply up to 15,000 tonnes a day of concrete for the project, sending it down to Melbourne via freight train.

Northern Victoria MP Jaclyn Symes said she was disappointed for Benalla, but had been expecting the Coalition and Greens to block the project.

“For my community, their concrete factory is now halted and that means 400 jobs are at risk,” she said.

“It’s political point-scoring – it’s very frustrating and it sends a very bad message to the business community.”

The Labor Party said cancelling planning approval for a major project already under construction was unprecedented in Victorian history.

Ms Symes said using the Upper House to block planning approval for a project already underway should be done with extreme caution because it could undermine infrastructure projects across the state.

Benalla mayor Don Firth had labeled the project a ''game changer'' for the city.

Some people from the North East saw it as a chance to move back to Benalla and Wangaratta.

“The opportunity to get a good job in your area is very important,” Ms Symes said.

“It just brings back so much confidence to a town.”

She said the government would not give up on continuing with the West Gate Tunnel project, or the Benalla concrete factory, and had other legal options it could pursue.

The Greens say the the tunnel is the "wrong project" which would flood central Melbourne with traffic and they want the government to focus on public transport.

Opposition planning spokesman David Davis said the approval process was denied because the West Gate Tunnel is a "dud project" and other road users would face an "escalator of tolls" each year under the current proposal.