Surrey police have announced their intention to withdraw from Britain's biggest police privatisation contract in the face of active campaigns against the move by some of the declared candidates for the job of the force's police and crime commissioner.

Surrey police authority decided on Thursday to suspend its involvement in the £1.5bn joint "business partnership programme" with the West Midlands police after a discussion in which the failure of G4S to deliver on Olympics security was cited as a factor.

"Members agreed today that it is right that we should suspend our involvement at this time and that we should look to withdraw altogether following a more detailed assessment of our options in September," said the police authority chairman, Peter Williams.

The West Midlands police authority reacted to the Surrey announcement by postponing its decision on who should get the contract until after the election of police and crime commissioners has taken place in November.

"Work will continue on the West Midlands programme so the new PCC has a range of options when he or she takes office," said a statement.

G4S are on a shortlist of six groups bidding for the programme, under which private companies were invited to take over a wide range of policing functions including detaining suspects.

Williams said Surrey had always maintained they were prepared to drop the programme if it became apparent that significant benefits to the police and public were unlikely to be achieved. He said: "Potential PCC candidates are now actively campaigning to put a stop to the business partnering programme and the authority agreed that it would not be prudent to continue to invest Surrey taxpayers' money in a programme that seems unlikely to be brought to a fruitful conclusion."

Both police authorities agreed in April to a short pause in the contracting process to build public confidence in the programme and attempt to dispel the idea it was about privatising core police services.

The decision came as the mayor of London, Boris Johnson, disclosed he was prepared to consider outsourcing any part of the Metropolitan police's activities beyond the "irreducible core of police business requiring the use of police powers which should never be privatised". The Met faces decisions after the Olympics on covering a £233m gap in its future finances.

Ben Priestley, Unison's national officer for police and justice, said: "We are pleased that Surrey police has seen the light and dropped its plans to privatise vital local services.

"The sell-off plans are deeply unpopular with the public, and would make people feel less safe. Today police staff sent bosses at West Midlands police authority a strong message that we want the sell off plans to be dropped.

"The problems that G4S has had delivering on the Olympics contract exposes one of the many pitfalls of hiving off services to the private sector. The government may claim that risk is transferred, but in reality it is not. When things go wrong, the public sector has to come to the rescue and the taxpayer ends up paying twice."

In the Commons, Keith Vaz, the chairman of the home affairs select committee, called for a pause in government contracts being awarded to G4S, and was backed by at least one Conservative MP Philip Hollobone, who said: "G4S have let down the country."