TESCO has reported its first full-year increase in UK sales for seven years as the supermarket's recovery under boss Dave Lewis gathers pace.

Like-for-like sales rose 0.9 per cent in the UK last year, Tesco's first reported full-year growth since 2009/10.

The supermarket giant said operating profits rose 30 per cent to £1.28bn, while total sales increased 4.3 per cent to £49.9bn.

Mr Lewis said: "We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October.

"We are confident we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions."

Like-for-like food sales in the UK were up 1.3 per cent.

However, on a statutory basis, pre-tax profits fell 39 per cent to £145m after the firm booked an exceptional £235m charge linked to payments to UK authorities over its 2014 accounting scandal.

Mr Lewis reiterated Tesco's proposed £3.7bn merger with Booker will add shareholder value.

He said: "Our proposed merger with Booker will bring together two complementary businesses, driving additional value for shareholders by realising substantial synergies and enabling us to access the faster growing 'out of home' food market."

However, a number of investors have spoken out against the deal in recent weeks.

Both Schroders and Artisan, which own nine per cent of Tesco, have publicly said it should be called off, insisting that the price being paid is too high and that a merger will distract from the core business.

The tie-up is also expected to face scrutiny from the Competition and Markets Authority, which could force Tesco to offload stores if it deems the deal harms competition.

Booker is the country's largest wholesaler and owns the Londis and Budgens convenience store brands.