Controversial supermarket bid to be abandoned after three-year battle

Plans for a Sainsbury's at Station Road were first revealed by the council, developers St Modwen and the supermarket giant in 2011.

But the plans caused huge controversy in Newport, where residents launched a campaign to fight the development, fearing it would devastate the town's High Street businesses.

The application was approved by Telford & Wrekin Council, which owned the site and which stood to make £21m in land sales, but was called in by Secretary of State Eric Pickles.

A planning inquiry was held at the beginning of last year but the inspector died before reaching a conclusion, prompting another to be set up which was due to go ahead next January. Now this second inquiry will not take place.

Meanwhile, an Aldi store has been approved at the former Focus DIY site in Audley Avenue.

Now the council has announced that the planning application for Sainsbury's will be withdrawn at its Cabinet meeting - subject to councillors backing an agreement with St Modwen to build around 120 homes on the site.

In a statement the council said: "The net cost of the withdrawal of the Station Road supermarket proposal, already met by the council, is a total of £465,000.

"A new application for the Station Road site, if approved, would create a multi-million pound receipt for the council."

Councillor Bill McClements, cabinet member for finance and enterprise, said: "This proposal reflects the changing national retail landscape, together with the implications of the approvals of the Audley Avenue and Aldi applications, the delay in the public inquiry and the outcome of negotiations between the council, St Modwen and Sainsbury's.

"Our responsibility as councillors is always to obtain the best value for our local tax payers from the sale of any council asset. That was our approach to the sale of the Station Road site.

"This alternative proposal would now be the best sale value solution, generating a significant multi-million pound receipt, which would be used to help protect the provision of vital services such as care packages for our elderly residents.

"As well as giving some help with the budget pressures from the swingeing cuts in funding imposed on councils by central Government, this alternative proposal will also address some of the housing needs that have been identified and in line with the Government's planning policy."

Despite celebrating the decision, opponents today criticised the council for "wasting taxpayer's money" on the failed project.

Councillor Andrew Eade, Conservative group leader on the borough council, said: "The politicians responsible for this fiasco must now be held to account for their incompetence in wasting public money on trying to bulldoze their own planning application through at the expense of other people and the local community."

Councillor Adrian Meredith, on behalf of the Save Newport Campaign, said: "I am absolutely delighted that it is not going to happen."

He said Newport did not need any more houses and the Station Road site should instead be used as public open space.

Patrick Beech of Newport Chamber of Commerce said the withdrawal had "saved the High Street".

He said: "So after years of hard work it looks like it has all paid off for the traders in the town centre who between them sell the same items as Sainsbury's. We have saved the High Street."

A St Modwen spokesman said: "St Modwen can confirm that, subject to the council's approval, the application for a food store in Station Road, Newport, will be withdrawn.

"St Modwen will be working with Telford & Wrekin Council to find suitable alternative uses of the land."

Sainsbury's was unable to comment.

Council spokeswoman Emily Knightley said the scrapping of the supermarket application would have "no impact" on this year's council budget.

She added: "Many things will be taken into account when members consider budget proposals later in the year and if plans go ahead for a new application on the site, there will be money from that which could be included in future budgets."