Minel, which owns the Whitburn Lodge and its surrounding land, had put the site up for sale in the lead up to Christmas.
Now it is no longer for sale, while questions are being asked about what will happen next after an application briefly submitted to demolish the pub was withdrawn.
Related: Landmark Whitburn Lodge up for sale six years after closingWhitburn Neighbourhood Forum says it raised concerns about the notice - a prior notification stating the owners wanted to knock down the derelict bar - with South Tyneside Council after it highlighted a planning application should be put in if a pub is to be razed to the ground.
Man in life-threatening condition after 'serious collision' involving car and pedestrian in South Shields
Campaigners rally against Local Plan after farmland in Cleadon earmarked for 156 homes
Appeal to find owner of lost Labrador after dog found near Jarrow Cemetery
Pair set up cannabis farm in town centre flat
South Shields man jailed for terrifying physical and sexual assault on woman in her own home
The council has since confirmed a notice put up outside the property in Mill Lane was incorrect.
The owners have previously said they hope to get the land on a list earmarked for housing development and suggested as such when they put it on the market, but the details advertising the sale have now been taken down from online sites.
Phil Leaf, chairman of the forum, said: “Now the notice has come down and we know they will have to put in a full planning application, we want to hear what people would like to see happen to the site.”
Dave Craggs is a member of the forum and is also pub preservation officer for the Sunderland and South Tyneside Branch of Campaign for Real Ale.
He said: “We would prefer it to be a pub there, but we don’t think there’s a need for housing, especially as there are houses nearby which have been for sale for some time.
“Our schools and doctors surgeries don’t have space, but we are short of a pub to the north, because the next one along is the Marsden Grotto and then in the village we have the Grey Horse and Jolly Sailor.
“We have previously tried to get it listed as an Asset of Community Value, but the owners went to the council and put their two pennies worth in and it was taken off.”
A council spokesperson said: “The applicant proposes to demolish Whitburn Lodge and a planning application is required in order to do this.
“However, the owner of the site submitted the incorrect planning form to the council and has posted an incorrect notice on site. The Council has made the applicant aware of this error and has returned his submission.”
The prior notification process relates to permitted development rights, or deemed consent, that already exists under planning legislation, but pubs do not benefit from these provisions.
A spokesman for Minel confirmed the proposal to demolish the pub had been withdrawn and is not proceeding for consideration.
The next meeting of the forum will be held at Whitburn Methodist Church in North Guards from 7pm to 9pm on Wednesday, February 13.