TESCO still wants to build a store in Leek at a site which has been sold to a housing developer.

The supermarket giant was believed to have had its hopes dashed when the Adams Food Ingredients plant, in Prince Street, and Tattons Mill, in Buxton Road, were sold to Hawkstone Properties.

But this week Tesco claimed the sale was "not a done deal", despite assurances from the housing developer.

It now plans to press ahead with a scheme to build a store, petrol station, offices and after-school club.

The company is so confident it can still buy the site, it has released an artist's impression of how the development would look.

And a planning application has already been submitted to Staffordshire Moorlands District Council.

Tony Fletcher, Tesco's corporate affairs manager, said: "We are going ahead with the plans. We feel there are a lot of bridges to go over and the purchase is not a done deal.

"We are still hoping to bring a Tesco supermarket to the site."

The proposed 47,189sq ft Tesco store would bring 250 full and part-time jobs to the area.

Mr Fletcher added: "It is in easy walking distance of the town centre and will regenerate a key gateway.

"It would also help to attract shoppers back into Leek to do their main weekly shop."

But Simon Handslip, of Hawkstone Properties, insisted the company had completed the purchase.

He said: "The deal is complete and we are looking to build residential homes on the site, which we feel is well supported."

The latest development comes as protesters fighting plans for two supermarkets took their campaign to the streets.

Members of Leek Chamber of Trade and Commerce were barred by Staffordshire Moorlands District Council from setting up a base in Market Place.

So they handed out leaflets and flyers to shoppers and passers-by in Derby Street.

Business leaders fear the arrival of Tesco and Sainsbury's, which plans to open a store at the Churnet Works, could spell the end for independent businesses.

The Chamber of Trade says it is not opposed to new development, but wants new stores to be built in the town centre.

A spokesman said: "Our message is simple, we want to see Leek as a viable, vibrant market town, and we believe that an in-town supermarket development would become a lifeline for the town centre redevelopment of Leek."

Save Our Leek – a lobbying group set up to fight the proposed out-of-town shopping developments – was due to hold its second public meeting at The Swan last night.

Founder Richard Wilson, aged 49, of Spring Gardens, Leek, said: "We believe that there are other sites which could be looked at. "It is the right thing in the wrong place."