Speaking to the Official Club website Town boss Joe Royle said: "We have decided not to take up that option. James and I agree that we haven't seen the best of him while he has been here.
"In his defence, he has not had that many starting opportunities with Shefki Kuqi coming back from injury sooner rather than we expected.
"We also have Dean Bowditch back from Burnley now so we have options in attack. I'd like to wish Scowie well. He is a lovely lad and I hope it works out well for him wherever his future lies."