Planning proposals would make it easier for Tesco's rivals to open in areas where the supermarket chain already has a presence

The Conservative party would support a competition test that would make it easier for Tesco’s rivals to open where it is already dominant and harder for Tesco to expand, according to a report in The Sunday Times.

The planning proposals are contained in a leaked green paper due to be published this month.

If they win the general election the Conservatives will also reintroduce a needs test to force developers to prove there is demand for any new project, a rule which was scrapped by Labour at the end of last year following a recommendation by the Competition Commission.

The Tories also plan to scrap national building targets for new homes and hand decisions to councils and local residents, which has raised fears that housing development will be stifled by “nimby” councillors.

The Conservatives said the proposal would speed up development and streamline the planning system.