A key estate agency partner of Tesco's online estate home-selling site, launched yesterday, is pulling out of its contract Times Online has learnt.

Joe Slavin, chief executive of fish4homes, the biggest portal signed up to the site told Times Online that he had "terminated" his contract with tescopropertymarket.com, a move that will result in Tesco losing out on tens of thousands of referrals from about 7,000 estate agency branches around the country.

Spicerhaart, one of London and the South East's largest group of agents and a member of the fish4homes network, has already pulled all online advertising of its housing stock from tescopropertymarket, Mr Slavin said, over concerns that that Tesco site would conflict with its business.

Tesco started on Monday offering home sellers to post details of their property directly onto its website for a flat fee of £199, undercutting estate agents who can charge up to 3 per cent of the value of the property.

However, the site needed a portfolio of homes for sale from day one to attract traffic, hence it signed up fish4homes as a partner.

A fish4homes spokeswoman said it had been "misled" by the nature of Tesco's strategy when it signed up a partnering agreement with tescopropertymarket.co. It had assumed that only its homes would go on the Tesco site.

Mr Slavin said: "We thought it was going to be just another portal link. It was not clear [when we signed up] that they were going to have their own home sellers. It was supposed to be a classic white label partnership. Our agents win by getting traffic, they [Tesco] win by knowing who is in the market."

Tesco would have gained, Mr Slavin said, by knowing who was due to move thus affording extra opportunities to sell bulky goods such as furniture and fridges.

Tesco said today: "We expect our partners will benefit from increased traffic to our site."

The only other estate agency portal signed up with Tesco is Smartnewhomes.com.

So far all the properties listed on the Tesco website come from fish4homes but Mr Slavin said he had now invoked a 90 day break clause after which all the listings from his member firms will be removed from the Tesco site.

Individual agencies can however opt out of the Tesco site sooner if they want, Mr Slavin added. About a dozen agencies, Mr Slavin said, "of all shapes and sizes do not want to be part of it". Spicerhaart's brands include Spicer McColl, Felicity j Lord, Darlows and haart.

The fish4homes website is owned by Newsquest Media Group, Trinity Mirror and the Guardian Media Group Regional Newspapers.

Propertyfinder and Rightmove, the two big rivals to fish4homes had refused to partner with Tesco even before the website was launched.

Mark Davis of Tescopropertymarket.com had said that his website "was going to revolutionise the property market."

Warren Bright, chief executive of propertyfinder.com, said "We see this (Tesco's venture) as a clear attempt to undermine estate agent, who play a valuable role in the property transaction process."

Andy Etches of BrightSale, a newly launched housing website said "The pure 'sell it yourself' online model as proposed by Tesco is fatally flawed. Selling a home is a very big deal, and the feedback we have had over the past six months is that people do not feel confident in going it completely alone."

House hunters looking for properties at Tescopropertymarket.com can still find three homes advertised on its site priced at over £7 million all on the Bishops Avenue in north London.

Tesco claims that since its launch the website has had over 140,000 visitors who have viewed over a million property pages - nearly 600,000 yesterday alone.

Tesco added: "Fish4Homes have an agreement with Tesco Property Market which we expect them to honour. We hope they will reconsider their decision... but whatever happens they must allow agents to chose whether to opt in or out of Tesco Property Market for themselves."

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