The government has signalled it may throw its weight behind proposed laws that would protect smaller stores.

Phil Woolas, minister for local government and community cohesion, told a rally in support of the Sustainable Communities Bill he would be happy for civil servants to discuss ways of drafting mutually acceptable wording in the provisions of the Bill.

Asked if he would try to block the Bill, which is currently being discussed by a House of Commons committee, the minister told the rally: "I wouldn't dream of it." His words brought applause from members of the 1,000-strong audience at the Methodist Central Hall, Westminster.

Steve Shaw, campaign co-ordinator for Local Works, said he had high hopes the Bill might now become law.

"This is an important development. It's encouraging that the government is now engaging with us."

Local Works would be happy to negotiate legislation wording - as long as there was no attempt to dilute the Bill's aims.

The Bill is intended to give local people and councils a greater say over spending and planning in their communities and more power to halt the spread of supermarkets.

Both Tory leader David Cameron and Liberal Democrat leader Sir Menzies Campbell made speeches at the rally giving unqualified support for the Bill.

Cameron warned: "There must be no attempt to water down the Bill."