Dobbies Garden Centre, the AIM-listed group at the centre of an ownership struggle between Scottish billionaire Sir Tom Hunter and Tesco, will proceed with its £150 million rights issue after Sir Tom failed in a legal bid to block the move.

Sir Tom, who own 29.2 per cent of Dobbies through his West Coast Capital Investment Vehicle, asked a court to freeze the proposed rights issue because it was not in the “interests of all shareholders.”

But this afternoon a judge in Edinburgh turned down the request, Dobbies said in a statement adding that it intends to put its proposed rights issue to a shareholder vote at its Annual General Meeting next week.

A spokesman for at West Coast Capital said "We respect this judgement. It is our intention to speak to Tesco’s in order to seek a fair solution for all 300 [minority] shareholders, many of whom have written to us unsolicited in support of our actions. Should a fair resolution not be forthcoming we reserve our right to continue down the legal process."

Tesco, Dobbies’ largest shareholder with 65.5 per cent, said: “We're delighted that the court has found in Dobbies' and Tesco's favour and that the [rights issue] can proceed as planned.

“Tesco believes this offers an attractive means for Dobbies to raise the capital it needs for future growth and we are pleased Dobbies will now be able to devote its energies to progressing its exciting expansion plans."

Sir Tom is opposed to the rights issue because under its terms he will have to pay £44 million to retain his stake at its current level.

His lawyers told the court it was engineered as a means for Tesco - which launched an unsuccessful takeover of Dobbies last year - to extend its influence over the garden centre group.

Dobbies says the rights issue is essential for its expansion plans and has nothing to do with shaking up its shareholder register.

Sir Tom is Scotland's richest person with a £1.05 billion fortune according to The Sunday TImes Rich List.

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