Councillors have backed a controversial deal which will see a new supermarket built on the outskirts of Oswestry despite fears it will ruin the town’s small traders.

Campaigners say the deal, known as a 106 agreement, does not go far enough in safeguarding the future of Oswestry town centre.

The deal outlines what benefits the town will receive in return for allowing the supermarket complex to be built on the Smithfield livestock site in Shrewsbury Road.

But there were cries of “shame, shame” from the packed public gallery at the Shropshire Council planning meeting in Oswestry’s Castle View council offices yesterday when councillors agreed the terms of the deal.

Among the benefits will be road improvements worth more than £250,000, a sum of £5,000 to install new street signs, £10,000 for improved bus shelters, bins and benches, a shuttle bus service to run for 20 years and a new park and ride.

The decision to agree to the legal conditions clears the way for the development, put forward by Oswestry Town Council, Oswestry Cattle Auctions and developers Liberty Mercian. Planning permission was granted in October to turn part of the Smithfield land into a superstore, cinema and petrol station with plans including a garden centre, offices and a 900-space car park.

Developers say a park and ride shuttle bus will help connect it with the centre.

Objectors say the agreement does not protect the centre and does not ensure the capital receipts Oswestry Town Council is expected to receive for the project, which could be about £6 million, are used to regenerate the town centre.

A statement from the town council said it had pledged to use that funding for the good of the town.

But Andrew Tulloch, for the Oswestry Coalition protest group, said that the economic climate had changed since planning permission had been granted for the development. He said: “The world has changed and Oswestry’s vulnerability to a development like this is all the greater.”

However, Councillor Joyce Barrow said: “This development includes the revitalisation of our livestock market which is at the heart of Oswestry’s regeneration.”

By Sue Austin