A Chinese-led consortium has withdrawn its $281.5 million bid for Australia's vast Kidman cattle empire after the government indicated the deal was not in the national interest, the seller said Tuesday.

Australia's biggest private landholder S. Kidman and Co. had selected the bid by Chinese-owned Dakang Australia Holdings and ASX-listed Australian Rural Capital (ARC) as the preferred buyer for most of its stations, with Dakang to take an 80 percent interest and ARC 20 percent.

But in a preliminary decision last week Treasurer Scott Morrison said the offer, worth more than Aus$370 million (US$281.5 million), was "contrary to the national interest" given the proposed size of the Chinese acquisition.

He gave the consortium until Tuesday to respond, but Kidman's managing director Greg Campbell said such a tight timeframe meant terminating the bid had been the only option.

"As a consequence of these discussions, Dakang Australia Holdings Pty. Ltd. has withdrawn its current application to the Foreign Investment Review Board," Kidman said in a statement.

Campbell said Kidman family shareholders were resistant to seeing the 120-year-old company broken up, a move he said would result in significant reduction in its value.

Kidman, which is currently 34 percent foreign owned, would also be seeking clarity from the Australian government about the level of foreign investment it deemed acceptable, he said.

He added that the company would continue discussions with the consortium.

Kidman has attracted keen interest from Chinese firms wanting to secure the sprawling pastoral empire amid growing concerns about valuable agricultural and mineral assets passing into foreign hands.

More than 130 Australian parties had been approached as part of the initial sale process starting in April 2015, according to Campbell, but no final bids were received.

"It is important to note that no final bids were received from Australian parties at any time during the extensive and lengthy sale process," he said.

"Australian parties remain welcome to come forward and express interest in acquiring the business in its entirety.

"We also welcome interest from anywhere around the world, including the USA, Chile and New Zealand."