The government's planning inspector has said that Tesco's application to expand its Mather Avenue store can go ahead.
The application was originally turned down by the City Council planning committee after residents and others said the plans would destroy open space. But Tescos appealed and the store's appeal has been successful.
Campaigners still have the option of taking the whole thing to the High Court, but legal experts say this is a difficult route with no guarantee of success.
The decision by the government inspector is a hard blow for those who had argued that the supermarket's plans to build on playing fields risked destroying part of the character of Mather Avenue. But Liverpool University, which owns the playing fields, was keen to sell.
Tesco says it will work with local people to take things forward, and that work should start in summer 2006. It also says that it will pay for new pitches to be created on parts of the playing fields not being used.
Councillors for Church Ward - Erica Kemp, Richard Kemp and Colin Eldridge - have been working to represent people living in the area around Tescos. The Councillors will remain involved to try to make sure local people get the best possible deal. It seems however that the government has effectively removed the right of local people and elected councillors to make this decision on planning.
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