In July 2012, the company was refused permission to build a 63,000sq ft store on the former Smiths Industries site, on The Harrow Way.
An appeal against the rejection of the plans by Basingstoke and Deane borough councillors was also dismissed last year by the Government’s planning inspectorate following a seven-day planning inquiry held in February.
The appeal was dismissed by a Government planning inspector because of the impact on nearby shops at the Brighton Hill District Centre.
But this week, Tesco bosses have said they are again in discussions with Basingstoke and Deane Borough Council, and they have submitted preliminary plans to build a smaller store as well as up to 48 new homes.
The new proposals would create 200 new full and part-time jobs, which would be targeted at local people.
Many more jobs would also be created during the construction of the store and the new homes.
Jack Pearson, Tesco’s corporate affairs manager, said: “We are at the very early stages of the planning process and want to get feedback and suggestions from local members before we make a planning application.
“We believe that a smaller store, around two thirds the size of the one originally suggested, would still provide a great new shopping experience for local people.
“It would also allow us to regenerate the rest of the brownfield site by building up to 48 attractive new homes for the local community.”
Tesco is still planning to maintain its major investment to improve the local road network through a £5million package of measures, which were previously approved by Hampshire County Council.
The company has also confirmed that the smaller store would not include a pharmacy, post office, optician or travel agents, to avoid direct competition with existing local businesses.
Mr Pearson said: “These are emerging plans and we welcome input and ideas from the local community. We will be setting up meetings with interested parties and hosting a public exhibition of the proposals in the weeks ahead.”
He said: “The jobs and career opportunities provided by this development will be extremely welcome in Basingstoke. I’m also delighted to see new housing included in the plans, which is sorely needed in the area.”
But Mark Buttress, who owns Jaybee’s Convenience Store, in Kings Furlong, is still unhappy about the plans, having campaigned tirelessly against the previous application.
He said: “I’m sick to death of Tesco. They are trying to bully boy their way back in. This proposal will affect all local businesses in the area. It’s a threat to Asda – how many supermarkets do we really need this side of town? We already have Asda, Sainsbury’s, Morrisons and Lidl.
“We have gone through all this before, the council rejected it and the appeal was refused. Even if it’s been scaled back in size, it will still generate more traffic in the area, and no doubt they will want it to be 24 hours which isn’t ideal for local residents. They need to get the message that it’s not wanted.”