SAINSBURY'S has today dramatically pulled the plug on plans to build a multi-million pound supermarket in a Hampshire town.

The retail giant aimed to create more than 200 jobs by knocking down their 30-year-old store in Eastleigh and replacing it with a larger version.

But today the firm has announced it is withdrawing its plans claiming it “cannot support the costs” of the ambitious project.

Andrew Pepler, Sainsbury's regional town planning manager, said: “We have explained to the council that we cannot support the costs of the project and would not be able to sign the legal agreement and secure planning consent.”

The firm's plans included moves to build a state-of-the-art bus station, 500 extra parking spaces, new public toilets, a café and children's play area are part of the plans put forward by the retail giant. But campaigners have slammed the proposals because it will mean that more than 500 square metres of Leigh Road Recreation Ground is taken up by the new development.

Rescue the Rec, which organised a protest at the park on Saturday, said the new store would concrete over precious green space.

Max Whitehand, Sainsbury's regional development executive, added: “We are conscious that this decision will be very disappointing to a lot of people in Eastleigh and we would like to thank all those who supported our proposals. We very much regret that we will not be able to take forward this opportunity to invest in the regeneration of Eastleigh. We are happy to take up the offer of further discussions with the council.”

The decision will come as a blow to bosses at Eastleigh Borough Council who are trying to regenerate the centre of Eastleigh.

A new multi-million pound hotel has already been built and the Swan Centre's leisure complex was completed in recent years.

A council spokesman said: “Eastleigh Borough Council has worked over a number of years to improve Eastleigh town centre and bring new visitors to the town.

“The council welcomed Sainsbury's interest in investing in Eastleigh town centre and is disappointed not to be able to reach a conclusion on this proposal at this time. We continue to look for opportunities to continue the regeneration of the town centre and the borough as a whole.

“We remain open to further discussions with Sainsbury's in the future on how they might invest in Eastleigh town centre.”

More reaction in tomorrow's Daily Echo.