DEVELOPERS last night moved to dispel rumours that supermarket giant Tesco was pulling out of its plans for a Suffolk town.

The retailer is set to move onto a derelict site in Church Street, Saxmundham, as part of a larger scheme.

The East Anglian Daily Times has been contacted by residents who had heard that Tesco might be pulling out of the development.

But last night a spokeswoman for the supermarket giant and the company behind the over all scheme said this was untrue.

A Tesco spokeswoman said they were committed to Saxmundham and the project was progressing as planned.

Stewart Deering, director of Reef Estates, which is leading the development, said both parties were “fully committed” to the scheme.

“We are currently out to tender and are due to commence works in June this year,” he said.

Suffolk Coastal District Council gave the green light for the redevelopment of the Church Street site – opposite the current Waitrose supermarket – last year.

The development will see the construction of four retail units and 146 car parking spaces – a move that has been warmly welcomed by the local community. Tesco has agreed to move into the largest unit, which will have a sales area of 1,420 sq m (15,300 sq ft) and is expected to generate 165 full and part-time jobs.

The news was largely welcomed by residents and retailers, who are mostly in favour of the store’s central location and hope it will encourage more people to visit the High Street and shop in the town centre.

Tesco has also unveiled plans to open a 20,000 sq ft (1,860 sq m) store in nearby Leiston.

The supermarket would be in Abbey Road, next to Jewson, and is expected to create 200 jobs.