TESCO’s rivals will seek to stymie the unrelenting expansion of Britain’s biggest supermarket chain this weekend when they submit initial responses to a Competition Commission inquiry into the grocery sector.

The responses to the commission’s preliminary findings, which were unveiled last month, are confidential. But it is understood Asda will say it is prepared to back radical proposals forcing Tesco and other rivals to sell off land and stores to boost competition – but only as a last resort.

It is believed Asda’s preferred remedy would be an overhaul of the planning system. It is expected to support the commi-sion’s proposal to introduce a “competition” or “fascia” test that would force local authorities to give preferential treatment to planning applications for new stores from retailers that do not already have a presence in the area.

But planning changes must first gain the backing of ministers. Asda would like the commission to support store and land divestments as an option if the planning innovations prove impossible to implement.

It is expected that Asda will say the commission must introduce tough remedies to improve consumer choice. It believes customers are losing out to the tune of hundreds of millions of pounds as prices are too high in many areas because there is insufficient competition.

Tesco, with 2,000 stores, has about 31% of the UK grocery market. J Sainsbury and Asda have about 16% each, with Wm Morrison taking 11%.

Sainsbury is expected to ask the commission to modify its proposal for a competition test so that it targets Tesco’s expansion without damaging its own growth prospects.

It is thought that Sainsbury would like the test to be applied only when a supermarket group already has a local market share of 50% or more.

Because Tesco has such a large market share this would act as a brake on its expansion. It is thought Sainsbury believes there is no point in having a competition test that affects all supermarkets equally.

Tesco is expected to insist there is no need for tough remedies because the grocery sector is already extremely competitive. It will fiercely oppose the introduction of a competition test or store and land sales.

Earlier this month, Lucy Neville-Rolfe, a Tesco board director, told The Sunday Times the supermarket did not support a competition test.

She said: “Such a so-called competition test would serve only to reduce competition for sites. It would, therefore, in effect be an anticompetition test. Retailers not as popular with customers as Tesco might be preferred by the test. Indeed, in some areas the only beneficiaries might be the more expensive retailers.”

The group is likely to argue that the planning system should be streamlined and made more efficient, possibly by strengthening the powers of local authorities to buy parcels of land to speed up new store developments.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive