Sainsbury's win Raglan Street site battle

Sainsbury's will build a £65 million supermarket on prime city centre land in Wolverhampton after Tesco finally agreed to sell its share, it emerged today.

The development, which will create around 300 jobs, will end more than a decade of wrangling between the retail giants over the right to build a store on Raglan Street in Graiseley.

Today it was revealed a deal has been struck in principal for Tesco to sell its 10 per cent stake in the site to Sainsbury's, which owns 86 per cent.

Both supermarket giants have planning permission to transform the land, close to Ring Road St Mark's.

It is believed Tesco will now make moves to transform the former Royal Hospital site off Bilston Road in All Saints into a supermarket as it originally intended.

A source close to the development from outside the council said today: "A deal has been struck in principal that Tesco will sell off its share of the land so Sainsbury's can develop the site.

"A figure has been agreed."

Tesco was named as the city council's preferred developer in 2008, partly due to its vow to redevelop the Royal Hospital site as part of a separate £50m project.

Following a series of court battles, last year the Supreme Court ruled the council had been "unlawful" by taking into account the separate development.

Judges ruled 4-3 in favour of Sainsbury's developing Raglan Street, despite Tesco fending off two earlier High Court challenges.

The matter was then referred back to the council.

Tesco's proposed transformation of the Royal Hospital with homes, shops and the new headquarters of the city's primary care trust is under threat after health bosses revealed they no longer could relocate.

Sainsbury's refused to comment this afternoon. Tesco was unavailable.