The troubled supermarket chain wanted to add 25% more floorspace and build a two-storey car park at its Kings Road site, so it could compete better with the enlarged Tesco, which now stocks a range of white goods, stationery, and clothes.

But West Berkshire Council rejected the scheme, claiming the retailer had not supplied enough information on how it would help Newbury town centre compete against booming Pinchington Lane. Planners also said granting permission could jeopardize the Park Way shopping scheme, by turning off interested competitors.

Sainsburys has been having a torrid time, and recently abandoned plans to build a depot the size of 18 football pitches next to Greenham Common. It was hoped that updating the supply systems would help keep stores fully stocked.

Last year, Sainsburys paid West Berkshire Council to build a new pedestrian crossing over the A339 to improve links between the town centre and supermarket.

At the same time, Tesco received permission to add 30% more floorspace at Pinchington Lane, and Waitrose was given the all-clear to open on the opposite side of town.