Irish planning authorities have denied that there is a change of policy on out-of-town retail developments, following another rebuff to market leader Tesco.

The latest rejection torpedoed a proposed new food store, petrol station and car park on the outskirts of Ballybofey. Permission had been granted by Donegal County Council, but that decision has now been overturned on appeal by the Irish Planning Board.

Earlier this year, a store planned by Tesco outside Cashel was also approved by the local council, but similarly vetoed by the board.

A board spokesman said that the rejections did not signal a policy change on out-of-town stores. Each project was treated on its merits, he insisted.

In Donegal, the appeal was lodged by local businesses and the Society of the Irish Motor Industry, concerned about the cut-price petrol the retailer was offering elsewhere.

The board said that according to the local area plan, the preferred location for new retail development, "where practicable and viable" was the town centre.

The location was outside a planned bypass link road and "an inconvenient distance" from the town centre, nearer which there were "viable alternative sites".

Tesco said that it was reviewing the ruling.