The Co-operative Group must sell seven more stores, on top of the 126 already earmarked for sale, to complete its £1.57bn acquisition of Somerfield.

The OFT cleared the deal to create the UK's fifth-largest supermarket in October but ruled there were competition concerns in 126 local markets. However, in the full text of the OFT's decision, published this week, the watchdog said this had risen to 133 following further checks on its methodology.

The OFT said ninety-four of the stores must be sold because Co-op and Somerfield were trading in the same area, while a further 39 must go in areas where independent co-ops - which share the same buying group as The Co-operative Group - were trading near a Somerfield.

It has given the Co-op the choice to sell either the Co-op or Somerfield store in each affected area, but the OFT must approve any buyers. The Co-op said it was "comfortable" with the decision.

The OFT carried out surveys at 400 stores on more than 35,000 customers before making its decision.

It also revealed it had relied heavily on the findings of the Competition Commiss- ion's latest groceries inquiry, including the proposed competition test currently being contested by Tesco. The test judges local competition based on a 10-minute drive time for one-stop stores or a five-minute drive time for mid-sized and c-stores in urban areas.

"This work has allowed the OFT and the parties to begin their analysis of the proposed merger at a relatively advanced level," the OFT said. "In particular, the OFT has benefited from the commission's work in devising a framework for local area filtering."

This use of the competition test will come as a blow to Tesco, which had its appeal against the test heard by the Competition Appeals Tribunal last week.

Asda, M&S, Waitrose and the ACS all opposed Tesco's position. A verdict is expected in February, with most industry experts expecting the decision to go against Tesco.