Tesco yesterday confirmed it is in talks to develop unused land it owns in a Norfolk market town - but denied it would be for a new supermarket.Last week the EDP reported that civic leaders in Diss were growing increasingly concerned that Tesco, which only built a supermarket in the town last year, is already planning a second, much larger store.

Tesco yesterday confirmed that it was in talks to develop unused land it owns in a Norfolk market town - but denied it would be for a new supermarket.

Last week, the EDP reported that civic leaders in Diss were growing increasingly concerned that Tesco, which only built a supermarket in the town last year, is already planning a second, much larger store.

The new Tesco store is next door to a much larger Morrisons, but Tesco also owns the land on the other side of their rival and representatives are known to have met with South Norfolk Council with a view to developing it. A spokesman said yesterday it would not be for a new Tesco supermarket but would not deny that the company was interested in building a retail park on the site.

Campaigners in the town - one of three in Britain to hold Cittaslow status for its emphasis on good quality, local produce - will be pleased there will not be a third major supermarket in the same small space.

But a new retail park could still leach custom away from Diss's independent stores - and be built on the only available town centre land, which councillors want earmarked for much-needed leisure facilities.

A Tesco spokesman said: "Tesco is not planning to open another store in Diss. Nor have we purchased more land since opening our store in the town.

"We do have some additional property interests in the area where we are no longer intending to build a store. We are actively discussing the best future use of the site with the relevant commercial and planning stakeholders."

He also said that Tesco had no plans to extend its existing supermarket, which opened last year as one of Britain's first eco-friendly stores, covered in wind turbines.

Brian Clark-Taylor, mayor of Diss, last week said he would be "very, very annoyed" if Tesco was allowed to develop on the site of the former Hamlin factory on the A1066 Park Road - a site that also contains the South Norfolk Council-owned bus station.

Yesterday he said: "I'm trying to get a meeting between all interested parties so we can discuss the future use of the Park Road site."