TESCO could be stocking cut-price Levi’s again despite losing its court battle 18 months ago to sell the jeans at a discount after sourcing them more cheaply from outside the European Union.

Levi Strauss said yesterday that it would launch a discount range of clothing, called Levi Strauss Signature, to be sold in supermarkets in Europe.

The manufacturer of the iconic jeans brand will shortly begin negotiating with discount retailers and supermarkets in the UK, France and Germany. The jeans are expected to go on sale next spring.

The decision to enter the discount clothing market in Europe follows a similar decision to sell Signature jeans in Wal-Mart, the US discount retailer. Signature goes on sale in America in July.

A spokesman for Levi Strauss said the company had realised that it could no longer rely on customers prepared to splash out large sums on jeans.

He said: “We want to sell our products where consumers are shopping and there are a growing numbers of shoppers who buy in value chains.” Levi Strauss hopes that Signature will prevent supermarkets and other discount retailers from sourcing its Levi’s jeans from the unapproved “grey market”, which sells out-of-season and factory excess stock.

The spokesman said: “With grey market stock you go to a supermarket and might find your size isn’t there or there are just one or two odd product lines.

“Signature is a full range of products including t-shirts, jackets and jeans for both men and women.”

Tesco said it would need to consider “very carefully” whether to sell Signature. A spokesman for the supermarket chain said: “You can now buy Tesco value jeans for £6 and customers are more likely to choose that option, but we want them to have the choice and it is brilliant that more people are going to have that.”

In the UK, Signature jeans will sell at about £25 a pair, £5 less than the cheapest Levi’s available in the UK.