Fast food chain McDonald's has dropped its claim for damages against a group of residents who protested at a new restaurant site in the small Australian town of Tecoma, 34km east of Melbourne in the Dandenong Ranges.

Residents staged a series of dramatic protests at the site, which delayed the start of construction by a number of weeks.

McDonald's had sought damages in the Victorian supreme court from eight of the protesters over costs brought about by the delay.

The company has also been granted a temporary injunction barring protesters from trespassing at the site.

A McDonald's spokeswoman confirmed the company was no longer seeking damages, but the rest of the case would continue.

The company is still seeking legal costs against the protesters and a permanent injunction at the site.

On Thursday, a four-person delegation from the group will attempt to deliver a petition against the Tecoma restaurant to McDonald's headquarters in Chicago.

The online petition has received more than 94,000 signatures. The case will return to the supreme court on Friday.