Akiva School in Finchley has backtracked on plans to expand to three-form entry.
In June, the primary applied to Barnet Council for funding to purchase the adjacent beit midrash from the Movement for Reform Judaism to make space for an extra form.
Philip Simmons, chair of the school's foundation, said then that the move had been prompted by high demand for places. But despite being awarded the funding, governors have now decided not to proceed.
Governors' chair Jon Epstein expressed gratitude to the council for its support. "However, having regard to the constraints of the site and the impact on our neighbours, we have decided that we should not expand beyond our present maximum capacity of 420 pupils."
A demographic study conducted by the school had been "inconclusive" in demonstrating major demand for expansion.
"We looked at all the research and looked at the site and realised the space available wouldn't have been suitable," Mr Epstein added. "We also considered our neighbours and thought there would have been issues with them over this."