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A controversial regeneration scheme which was given the go-ahead by Derby City Council could cost the city's retailers up to £70m per year. According to a council officers' report on the Friar Gate Development, the city centre alone would see "a minimum trade diversion" of £35m if the mixed-use complex is built.

Developer Clowes was given the green light for outline permission from Derby City Council's planning committee on Thursday (20 October) to build on the 7.9 hectare former Derby Railway Station and Goods Yard site.

Proposals, which are subject to a section 106 legal agreement, include the creation of a 134,548 sq ft supermarket and ground-floor shopping mall; a petrol station; restaurants; 150 new houses and 700 car parking paces. A further 23,960 sq ft of retail space could also be made available along with a heritage centre.

The scheme could bring an additional 780 jobs into Derby. However, planning officers said that due to the heavy retail aspect of the scheme, the city centre would lose out to the tune of at least £35m per year. This figure could rise to £70m when lost trade from nearby retail outlets Sinfin and Mickleover are taken into account, said the report.

"A worst case situation in overall impact on the city centre is likely to be £50m per annum," said council officers. It said it would stand to lose about 10 per cent of its trade.

The report said that the most significant impacts are like to be on sales in the Mickleover and Sinfin District Centres, stating the impact will be "between 20 and 30 per cent".

It added that Mickleover's Tesco store "could be most at risk" of closure.

However, officers concluded that all stores currently benefit from strong local retention and "appear to be trading well".

An external report commissioned by the council confirmed that both stores were overtrading to a considerable extent, the officer added, which means that they should be "fairly resilient" to some level of competition.

The report into the impact on the city centre concluded: "The level of trade diversion being considered here is likely to remain under 10 per cent. There would have to be a significant change in the market share of the city centre to undermine its overall vitality and viability in the long term."