SUPERMARKET giant Tesco is behind plans to build a new town hall in Darlington as part of a multi-million development.

The retailer is in talks with Darlington Borough Council about demolishing the town hall in Feethams and building modern council offices, alongside a supermarket and new housing. Council chiefs say discussions are still in the early stages, although a decision from Tesco on whether it will proceed is expected by Easter.

The proposed development site includes the town hall, the former bus station next door and the council car park on the opposite side of the road.

John Buxton, the council's director of development and environment, said: "There are a lot of stages to go through before this development can be considered probable rather than possible."

The authority has not released details of the layout of the proposed scheme, the size of the supermarket, the quantity of housing involved or the likely design of any new council building.

But Mr Buxton confirmed that the distinctive town hall, opened by Princess Anne in 1970 and which houses about 450 council workers, would be demolished if the plan went ahead. He said: "The fact is, it's not big enough and it's not flexible enough."

A new town hall would cost at least £10m and relocating the former bus station, now a garage leased by the council to Arriva, would cost several million more.

Three years ago, plans for a leisure complex on the bus station site fell through. Developer Terrace Hill received planning permission to build an office block on the other side of the road in 2002, but it has since sold its land to Knightsbridge-based Raven Newport Ltd.

The rest of the proposed development site is owned by the council.

A council spokesman said the proposed development would mean more car parking spaces, but it was too early to comment on how it could affect town centre traffic.

However, the Darlington branch of the Federation of Small Businesses said a Tesco store in Feethams could signal the end for smaller town centre shops. Chairman Peter Troy said "Another supermarket opening in Darlington would undoubtedly increase the pressure on local small retailers."

Andy Atkins, of Grange Road Traders' Association, said: "The issue is: will it draw more people into Darlington, which is a potential positive, or will it simply draw from people who are being provided for by existing retailers?"

Tesco is not prepared to discuss details of the plan.