A decision by supermarket giant Tesco to open its third Oxford store on the site of a disused pub has sparked concern among neighbours and shopkeepers.

Tesco has bought the boarded-up Friar pub in Marston Road, Marston, from restaurateur Clinton Pugh, who had previously planned to build shops and flats on the site.

Mr Pugh declined to say how much he had sold the site for.

Last night, Tesco spokesman Carol Lesley admitted an Express store had been mooted for the site.

The news caused concern among neighbours and traders who said they were worried the store would eat into their trade and have a negative impact on the area.

Marston Road resident Rebecca Teal said: "I'm absolutely gutted to hear they are building a store there.

"The original plans Clinton Pugh had for the site were much better and gave something back to the area.

"All this will do is add more money to the Tesco coffers."

Kathleen Kirby, who lives a few doors down from the Friar in Marston Road, said: "I would like some competition for the food shops, but not right on our doorstep.

"We are very loyal to Costcutter and if that goes because Tesco forces them out, then there will not be a post office in the area."

Ms Lesley added: "We have only just got the site, but I can confirm we will be working up a proposal for it.

"At this stage I would think we will be looking to develop an Express store on the site, which is the smallest type of store we have, aimed more at convenience shopping."

Crotch Crescent resident Mick Haines delivered a 1,000-signature petition to Downing Street in August, 2006, to keep the post office open.

He said: "We fought hard to keep the post office in Marston and we don't want to lose it because Tesco decides it wants to build a store here.

"If they start undercutting Costcutter - which they can afford to do - then it will go out of business and we will lose a vital service."

There has been a similar response from traders in the area, who now fear for their futures.

Sandra Kerwood of Seasons Delicatessen in Cherwell Drive said: "It will probably have quite a big impact on me.

"Small shops are being pushed out of another area and being taken over by multinational companies."

Pakeerathan Sivanes-arajah, manager of Costcutter in Old Marston Road, said: "A new Tesco would destroy the local community in this area.

"Whether it is Co-op or Costcutter, we are all going to suffer."

However, Ms Lesley dismissed these claims.

She said: "Shops like ours actually keep people in the area and can act as an anchor, with people linking shopping trips to other retailers.

"Retail is always competitive and always will be. At the end of the day it is good for the consumer and it keeps prices competitive."

Mr Pugh said he decided to sell the site to the supermarket chain after city council planners refused to back his plans for the site.

He said: "With the economy being the way it is, I don't have the time or money to fight planning officers.

"I've already spent more than £40,000 trying to get permission to develop the site of my Lemon Tree restaurant in Woodstock Road."