Tesco's plans to build a new Express shop in Ballards Lane, Finchley, less than one mile from another of its stores, have been scuppered.

A new convenience store was expected to open this month on the site of a former carpet warehouse, but the council rejected proposals because of the shop's expected harmful effects on the town centre.

The location would have seen the store surrounded by several major supermarkets all within a mile of one another, including a larger Tesco supermarket on the same street.

But a letter from the council's area planning manager, Anne Watkins, to Councillor Brian Coleman, London Assembly member for Barnet and Camden, revealed this week that the plans had been rejected.

"The project would have a significantly greater harmful impact on the vitality and viability of nearby town centres than the existing lawful use," the letter read.

Despite reassurances that Tesco will not be building the store for the foreseeable future, retailers still fear that the supermarket giant which controls more than 30 per cent of the overall grocery market in the UK will appeal against the decision.

Those directly affected include Ibrahim Sevinc, who, along with his family, spent his life savings on buying Finchley Delight Food and Wine store a convenience store located next door to the site.

"They Tesco will try to get it the council's decision overthrown," he said.

"We're hearing rumours that Tesco will appeal the decision or plan to open up a petrol station here, so I'm not really relieved.

"They are a powerful force and I'm worried they can still open up here. The community needs to stick together and unite against it."

Mr Coleman, who wrote to Tesco chief executive, Sir Terry Leahy, last November expressing residents' concerns, said: "I am delighted that Barnet Council has kicked out this proposal.

"Another anonymous supermarket chain store is not what we need on Ballards Lane. This is a unique area and a Tesco Express would not be appropriate.

"I would urge Tesco to accept the council's decision and forego its right to appeal."

A Tesco spokeswoman said: "No decision has been made yet as to whether we will appeal.

"While some people are unhappy about the decision as the premises are now empty and boarded up which is never a good thing others, such as the shopkeeper, are happy."