The Bank of Canada is abandoning its plan to release a $200 banknote, saying that too many merchants were opposed to the plan.

The central bank commissioned a survey of 2,000 retailers last December, asking whether the stores would accept a circulating $200 bill. Fifty-nine per cent said they were opposed, with 40 per cent saying they "strongly opposed" to the idea.

The telephone survey is considered accurate to within plus or minus 2.2 percentage points, 19 times out of 20.

Some retailers said they worried that the $200 bill would be counterfeited, while others said the bill would require them to keep an inordinate amount of change in the till.

Canada's highest circulating bill is currently the $100 bill. The bank stopped printing the $1,000 bill in May 2000 in an attempt to obstruct money launderers and drug dealers who traditionally favour large bills.

The proposal had not been submitted to federal Finance Minister Jim Flaherty.

The government plans to roll out a new $5 bill with improved security features in November.