Campaigners have criticised yesterday’s decision to reverse Competition Commission plans to introduce a ‘competition test’ into planning law as “a disaster for consumers”.

The ruling yesterday by the Competition Appeals Tribunal overturning the proposed test was hailed by Tesco legal affairs director Lucy Neville-Rolfe as “a victory for common sense” but has angered campaigners, who fear the move will help Tesco tighten its grip on UK retail.

“This green light for further Tesco dominance is a disaster for consumers, local shops and the environment,” said Helen Rimmer of campaigning website Tescopoly.

“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.”

She added: “Government must introduce planning policies to give local people a genuine choice of where to shop and to support vibrant and diverse town centres."

A further tribunal hearing is set for 16 March to determine what steps the commission can take to salvage the planned changes.