TESCO has received another setback in its attempts to gain a foothold in Darlington.

The supermarket chain is linked to a plan for a small shop, despite the recent rejection of huge scheme that would have transformed a quarter of the town centre.

Last night, it emerged that although a planning application for the shop conversion had been submitted and rejected by Darlington Borough Council, the council was not aware of Tesco's link to the site.

Although it refuses to comment, the Land Registry lists Tesco as the beneficiary of the former Shell petrol station, in North Road.

Tesco does not own the land and did not submit the planning application.

The Land Registry document shows the site is owned by Refined Petroleum Limited and the company that submitted the planning application - Manhattan Corporation Limited - has had an agreement with Tesco since December last year.

A plan to build a huge Tesco, 130 apartments and a town hall in Darlington town centre, was overwhelmingly rejected by councillors last month after a public consultation.

The North Road plan was for a much smaller shop. The planning application was rejected in autumn and none of the companies involved would confirm whether an application would be resubmitted.

Tesco said it had worked with Manhattan Corporation Limited in the past.

Mike Barker, who was part of the Say No to Tesco campaign, said: "There are a lot of small independent traders in that area already and I think they would be threatened and possibly put out of business by a Tesco."

A borough council spokesman said: "We received the planning application and it was considered on its merits, like any other.

"There was no mention of any specific supermarket operator that would have been based on the site they were proposing."

Councillor Steve Jones, who represents North Road, said: "The general feeling was that people were against the plans. There are five shops in the area which might have been badly affected.