Supermarket wars that have blighted Wolverhampton’s regeneration for a decade are set to re-ignite in the courts over planning permission for three giant stores, leaving more than 1,400 new jobs in the balance, it emerged today.

Peel Holdings is in talks with Morrisons about building a £20 million store in Stafford Street in a move that can today be revealed would flatten the Peel Centre, home to JJB Sports and Focus DIY.

But bosses are threatening to go as far as the Supreme Court if Wolverhampton City Council refuses the plan in favour of applications by Tesco and Sainsbury’s.

The council is desperate to resolve a decade-long dispute between Tesco and Sainsbury’s over a site on Raglan Street in Graiseley. Both owned part of the land and wanted to build a superstore but Sainsbury’s went to the courts after the city council favoured Tesco.

That was eventually settled last year in favour of Sainsbury’s by the Supreme Court.

But Tesco will now only sell its land to its rival if the council gives permission for it to build another store at the former Royal Hospital in All Saints, where 600 people would work. Sainsbury’s would create 500 jobs.

Peel wants to replace its retail park with a 78,000 sq ft supermarket.

Council bosses want all three applications dealt with on the same day, even though Peel has been waiting for two years for a decision, to avoid any one retailer getting an advantage over the others.

Tesco and Sainsbury’s have both objected to Peel’s plans claiming there is not enough business for three supermarkets.

Roger Wheeldon, senior development surveyor at Peel, said: “If we feel disadvantaged we will go to the Supreme Court. There is capacity for all three of us.”

Peel’s move would create 300 jobs and 537 car parking spaces. The Stratstone Jaguar dealership would be re-located further down Stafford Street and the council would get a £2m roundabout with traffic lights to get people in and out of the site as well as to the canalside area which is due for a major regeneration.