From Encores website in 1998:

Sadly, the much-anticipated release of Red Dwarf on PAL laserdisc has now had to be cancelled.
Thank you to everyone who took part in our recent survey to determine which version of the series would be most popular with laserdisc fans - even we were surprised by the results:

• Original Series, as originally broadcast on BBC2: 53%
• Special Editions, as recently shown on TV: 15%
• Special Editions but with 'filmic effect' removed: 32%

This showed that the most popular option by far would be to release the original version of the series (many people plainly stated that they felt the remastering had been a very big mistake). It also indicated that the use of filmic effect was one of the biggest irritations that people had with the remastering.
Since only 15% of the potential market would have been happy if we had released the Special Edition episodes, we knew we couldn't consider that option. However, despite our original contract and royalty payments which were for the release of the original version of the Red Dwarf, the series' production company, Grant Naylor, have now insisted that if the series is to be released at all, it must be as the Special Edition only.
There did not seem to be any way around this impasse, so we have reluctantly decided not to continue with our plans release this series.
We're very sorry for any disappointment this may cause, but please understand that in the current declining laserdisc market, it is only viable for us to release material which has the potential to sell enough copies to cover our production costs.

Survey can still be found on the archived page here: http://web.archive.org/web/19980702115253/http://www.enc.co.uk/reddwarf.htm