Campaigners warned of a new wave of "Tesco towns" today after the supermarket giant won a crucial appeal against proposed new planning rules.

A tribunal backed the world's third largest retailer in its appeal against the "Competition Test" - a key recommendation of the 2008 Competition Commission investigation into Britain's £120billion grocery market.

This would have given local authorities the power to block new store applications if they led to dominant clusters of branches of the same chain within a 10-minute drive.

Tesco, which has 1,700 outlets in Britain, has been criticised for blitzing towns such as Bicester with large numbers of stores.

Helen Rimmer, spokeswoman for the Tescopoly campaign group, said: "This green light for further Tesco dominance is a disaster for consumers, local shops and the environment.

"After two large-scale investigations the Competition Commission warned that Tesco's unchecked growth limits choice, and delivers a bad deal for consumers.

"It's unsurprising that Tesco face such a fierce backlash with over 200 campaigns across the country now listed on the Tescopoly website."

James Lowman, chief executive of the Association of Convenience Stores, which represents 33,000 shops, said: "We are disappointed that Tesco's appeal against the planning competition test has succeeded.

"This decision will mean yet more delay in the implementation of an effective town centre-first planning policy."

He said the competition test could have been used to stop a new Tesco superstore in Yiewsley in west London. There are already three superstores at Yeading, Hayes and Uxbridge and three Express stores within a 10-minute drive, he said.

Tesco was granted permission for the 7,390 sq m store in April last year after six applications over 14 years.

The Competition Appeal Tribunal, presided over by Mr Justice Barling, concluded that the Competition Commission did "not fully and properly assess and take account of the risk that the application of the test might have adverse effects for consumers."

They recognised that "there are a good many reasons why, if one retailer is blocked from developing a store, a replacement development by a different retailer may not occur."

Lucy Neville-Rolfe, executive director (Corporate and Legal Affairs) at Tesco, said: "We are delighted with the judgment, which is a victory for common sense, and endorses our view that the proposed competition test was ill-founded.

"A new test in the planning system would increase costs and make the process even slower and more bureaucratic."

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