When Tesco bought Quinnsworth for £640 million in May 1997, most industry observers thought it was only a matter of time before the Republic got its first superstore. Such outlets comprise enormous retail developments up to 90,000 sq ft where you can buy everything from baked beans to petrol from the same retailer.

Wasting no time, Tesco bought 12 acres of land in Malahide in October of the same year for a reputed £11 million with the aim of building an 86,000 sq ft standalone supermarket complex there.

The Ayrfield site near the M50 is perfectly situated to hoover up custom from its north Dublin hinterland. The planning application, lodged three months later, envisages a major complex which would include a petrol station, a clothing outlet, a video and music store, a cafe, dry cleaning, a health and beauty section and a flower shop.

Independent grocers were livid. RGDATA, the organisation representing 7,000 family-owned grocers, quickly produced a policy document warning of the dire consequences for community life in Ireland if superstore developments got the green light from planning authorities.

"The Tesco application for the development of a superstore at Ayrfield will be a test case. Many other British multiples are awaiting the outcome of the decision before deciding to develop superstores in Ireland," it warned. The report claimed British multiples were seeking to open in the Republic the type of giant superstores which legislation in Britain had recently curtailed. The policy document seems to have struck a chord in Government. Three months later the Minister for the Environment, Mr Dempsey, announced an interim policy directive limiting the size of supermarket development to 3,000 sq metres (approximately 32,000 sq ft).

It is not clear if the restriction applies to Ayrfield because the planning application was lodged before its introduction. This issue is currently being tested in a court case involving an unrelated development.

But since the imposition of the cap, independent grocers have not relented in their lobbying campaign. The Musgrave Group, which includes a network of 460 independently-owned Super Valu and Centra stores and recently added nine Roches Stores grocery outlets to its portfolio, set about systematically lobbying politicians at all levels in an attempt to make sure the ban on very large supermarket developments was made permanent.

In the last few months, the chief executive of Super Valu-Centra Distribution Ltd, Mr Eoin McGettigan, has met local authority members from all over the State in an effort to convince them that superstores would be a severe threat to neighbourhood shops and supermarkets.

He visited the Local Authority Members Association and the General Council of County Councils, and last week made a speech to the Association of Municipal Authorities of Ireland at its annual conference in Wexford. Shop owners were asked to make representations to their local public representatives and a major media campaign was conducted with the help of consultants, Fleishman Hillard Saunders.

Super Valu says that the network of community activists involved in the Tidy Towns competition, which it sponsors, was also of assistance in pressing its case home. Mr McGettigan told the local authority members that superstores need only take away 10 or 15 per cent of turnover from the main streets to "remove the profitability of local traders".

Consequently, he claimed, the opening of superstores would lead to "unemployment, the demise of essential services, migration and the destruction of the basic foundations of towns and villages". He predicted "massive inconvenience to the old, disabled, the disadvantaged" and anyone who isn't in possession of a car to take them to the out-of-town superstores.

The statement issued by the Minister for the Environment when he announced the interim cap on the size of supermarket developments, shares a lot of the misgivings expressed by RGDATA and Musgraves.

His department, he said, would commission a study of the potential effects of superstores on traffic patterns, roads, urban renewal and "the availability of an adequate retail system for all members of the community, including those who do not have private car transport".

The proliferation of large scale retail shopping developments in other European countries "had not been consonant with the principles of sustainable development". It would, he concluded, "be unacceptable to jeopardise the successful urban renewal policies of the last decade and the very significant public and private investment which has been made in them".

The large supermarket chains have been strangely reticent in the face of the onslaught from the independent grocers.

Tesco, which was reported earlier in the year to be interested in developing a number of superstores in Dublin, Cork and Galway says it is "still looking at the implications of the Minister's directive and how it will affect our business right across the board".

"It's far too early to frame a response when even the draft guidelines haven't been published," a spokeswoman said this week. According to Tesco, customer surveys, particularly in the catchment area of its proposed Ayrfield development indicate a desire from customers for larger stores. However, the argument about the merits or demerits of superstores is "not one we want to get into at the moment", a spokeswoman said.

Extending opening hours at existing outlets and refurbishing and rebranding its existing stores at a cost of £75 million is the top priority at the moment, Tesco insists.

Dunnes Stores will only say it is awaiting an announcement as to whom has been appointed to carry out the study on superstores for the Department of the Environment and is "keeping a close eye on the process".

Superquinn was reported to be interested in developing 50,000sq-ft superstores in Bray and Waterford before the cap was placed.

The company's managing director, Mr Feargal Quinn, says he can understand why the Minister for the Environment introduced the interim directive, especially in the light of statistics produced by RGDATA suggesting that 43 per cent of villages in Britain had lost their local shops as a result of the proliferation of superstores.

"However, taking into consideration the consumer's interest, my general position would be the less legislation the better. I think the size and nature of the cap is open to discussion and I would welcome the chance to make a submission to the consultants examining the issue."

He says the directive, as it stands, will restrict some of the shops designed by the group which were in excess of 3,000 sq metres. "I'd like to make a case so that the Minister will understand the benefits and disadvantages of what he envisages, but I understand his concerns and will be taking them into account when we make our submission."

Mr Dempsey has been considering tenders for his proposed study of the effects of superstores since September 9th, and is due shortly to announce who will conduct the study. The Department hopes that draft guidelines will be ready by the end of the year and that the finalised directive will be published early next year after a public consultation process.

Some supermarket industry sources fear the permanent guidelines may be even more restrictive than the interim directive, particularly given the severity of similar regulations introduced in France, Belgium, Britain, Spain and Portugal over the last five years. However, a number of these countries include get-out clauses, which allow a limited amount of development.

Mr Dempsey could, for example, make allowances for differing requirements in various parts of the State. A study carried out in Cork suggested the city and its outlying areas could sustain an additional 80,000 sq ft of supermarket space and a huge 500,000 sq ft of shopping for hardware, furniture and electrical goods.

The Department may also be wary of legal challenges from foreign multiples to a very restrictive directive on the basis that it might be anti-competitive and a barrier to entry into the Irish market.

However, for the moment the superstore plans are on hold while the Department of the Environment figures out how best to square the demands of a modern retail sector with its own environmental, rural development and urban regeneration plans.