A number of superstores planned by supermarket groups are now under threat following the ban on stores with more than 32,000 sq ft of floor space imposed by the Minister for the Environment, Noel Dempsey.

British supermarket giants such as Sainsbury may also reconsider any moves into the Irish market, although such restrictions may be interpreted as anti-competitive and challenged by large stores.

Tesco, the English retailer which has taken over the Quinnsworth chain, has plans to open superstores alongside the Liffey Valley shopping centre at Quarryvale in west Dublin, as well as at Malahide in north Co Dublin, and a site outside Cork city. It also plans to open a 45,000 sq ft supermarket in the new town centre in Dundrum.

Marks & Spencer has also earmarked a 50,000 sq ft anchor store in the centre. Meanwhile, Superquinn has applied to build large retail outlets in Bray and Waterford.

The viability of these projects will not be determined until a study ordered by the Minister into "all the implications of large scale retail shopping development with a view to preparing comprehensive planning guidelines" is completed.

The ministerial directive also restates in a strengthened form the considerations already contained in the 1982 Planning Directive, which must be applied to all other large scale shopping developments by planning authorities and An Bord Pleanala.

Tesco has said it will study the new regulations closely and will seek to ensure that "the benefits of consumer choice and competition can be fully accommodated in future retail developments". Meanwhile, the move has been warmly welcomed by RGDATA, which represents the independent grocery sector and the Society of the Irish Motor Industry.

Aidan O'Hogan of Hamilton Osborne King says there appears to be a real demand for large supermarkets and that many of the concerns being expressed about such superstores echo those which were voiced during the advent of the existing supermarkets. It is clearly a "defensive strategy" by some of the existing operators who are determined to keep competitors out of the market, he says.

Although the Society of the Irish Motor Industry (SIMI) was among the groups which lobbied the Minister for the Environment, many existing petrol stations offer convenience shopping facilities and have taken business away from small shops. "Many of the existing supermarkets have restricted other outlets, such as butchers, from going into shopping centres and have exercised their muscle to eliminate competition. Now they are turning their attention from the small guys to the bigger guys," says Mr O'Hogan.

It is not clear how the ban will affect applications already going through the planning process. However, it could "severely hinder" plans by Tesco, whose British stores can cover up to 90,000 sq ft of floor space, including up to 60,000 sq ft of retail space. If the ban is introduced on a permanent basis, it could force British companies to try and buy out existing Irish chains. "It has probably introduced a period of uncertainty during which very little will take place. The people in favour of the restrictions will get the benefit of it and would probably prefer that there is no finding on an early basis and that the whole thing slides," says one property source.

SIMI fears the arrival of out-of-town supermarkets with petrol stations, of the kind seen in Britain, and made representations to the Minister.

Cyril McHugh, its chief executive, is "delighted" with the announcement and has praised the Minister's decision to carry out a study on the implications of out-of-town superstores. The battle to stop such developments could have been lost within six months had the Minister not acted.

Petrol/retail outlets in Britain have been devastated by the introduction of large superstores with petrol stations, he says.

Prior to 1990, there had been 21,000 petrol/retail outlets in Britain, but this had now fallen to less than 10,000. Of these, 8,000 were independent stations which had a 25 per cent share of the market. In contrast, the 800 superstores with petrol stations had 21 per cent of the market, with each taking in 10 times the volume of business enjoyed by independent outlets.

In Scotland, "petrol deserts" have been created where motorists have to travel 40 or 50 miles to get a fill of petrol, says Mr McHugh.

Superstores also threatened the livelihoods of entire villages and towns, as well as Ireland's tourist industry. Relief roads funded by the Government and the EU could also face traffic congestion if such schemes went ahead, he says.

"We would get back to the kind of towns we had in the 1950s which were drab and uninteresting. There has always been development and the supermarkets did take business away from ordinary shops, but for the most part, they were close to town centres, so there was a spin-off for other businesses. But these stores would just vacuum up everything," says Mr McHugh.

"In terms of competition, just take Tesco, whose recent turnover was £1.5 billion - more than the Irish Government's revenue. How is a small grocery shop, or even small supermarket, going to contend with that?"

Michael Campbell, director general of RGDATA, says the ban will bring Ireland into line with other EU states and will be welcomed by hundreds of towns and villages.

"This measure ensures that no area of the country will be stripped of their local shops. The decision is in the best interests of proper planning and development and ensures that a nationally integrated plan will be taken to retail planning," he says.

"The Minister's decision also indicates to those doing business in Ireland that they will not be allowed to pursue their commercial activities at a cost to retail planning."