TESCO has withdrawn its plan to build a new store in Basingstoke.

Dave Lewis, chief executive officer at the supermarket chain, said it was shelving plans for the store, on the old Smiths Industries site in Winchester Road.

Tesco has also announced it will close 43 stores across the UK, and pulled plans for 48 other new stores.

In a statement, Mr Lewis said: “It is with a heavy heart that I am today announcing that we are unable to proceed with 49 planned new store developments across the UK, including our plans for a new store in Basingstoke.

“Our performance as a business has fallen significantly short of where we would want it to be and my absolute imperative has to be to protect the future of our business for the 300,000 colleagues we employ in communities all over the UK.

“I know that this news will be a real disappointment to many people in the local community and we’re extremely grateful for the support we’ve received for our plans.

“I am very aware of the importance of the site to the area and I am determined that we will work closely with the council to find the right solution for the local community.”

The chain has faced increased competition from discount supermarket chains in recent years. The announcement seemed to go down well with shareholders today, with shares in Tesco rising by more than nine per cent.

Tesco made its latest and third application to build a store on the site in November last year.

In July 2012, Tesco was refused planning permission to build a 63,000sq ft store there, and an appeal against the decision by Basingstoke and Deane Borough Council was dismissed last year by the Government’s planning inspectorate, due to the impact on nearby shops.

The new plan stated the store would be smaller, with 344 car parking spaces and 48 one, two and three-bedroom homes.

A pharmacy, post office, opticians and travel agent were excluded from the plan due to the reduction in the size of the store.

But the chain said it would have provided £5million of investment into the local road network, including plans for synchronised signals at the Brighton Hill roundabout.

The store scheme was set to create 200 full or part-time jobs.

Mark Buttress, who runs the Jaybee’s convenience store, in Kings Furlong Drive, Kings Furlong, had campaigned against the Tesco applications, fearing a new store’s effect on his business.

Today he told The Gazette: “It’s good news – the best New Year’s present I have had.

“It’s not surprising that Tesco are in the trouble that they are in, when there’s been such fierce opposition against this store. I dread to think how many millions of pounds they have spent on this project. Where the store is sited was never feasible.”

Councillor Paul Harvey, deputy leader of the borough’s Labour group, said his colleagues had conducted a survey of Brighton Hill residents just before Christmas.

He said 89 per cent of people surveyed were against the latest Tesco proposal.

Cllr Harvey added: “Residents and councillors need to be involved in shaping what happens next.

“While it is good that Tesco wants to talk to the council, the community and local councillors need to be involved too.

“I want to see proper engagement, proper consultation to shape what happens on that site.”

Do you have a view on the latest twist in the Tesco store saga? Is so, write to The Letter Editor, The Gazette, Pelton Road, Basingstoke, RG21 6XD, email editor @basingstokegazette.co.uk or use the comment facility below.