Tesco’s long-running bid to build a supermarket at Grafton Way in Ipswich is set to end in rejection from the borough next week.

The retail giant has been trying to build a store on the site for the best part of a decade – and seemed to have succeeded in its bid when planning permission for a superstore was approved nearly four years ago despite major objections.

However the downturn in the economy, legal challenges, and a change in Tesco’s retail strategy led the company to confirm earlier this year that it would not be going ahead with building a smaller supermarket on the site.

It still owns the site, and its development arm Spenhill was seeking permission for a development including a supermarket, hotels and a small number of homes. It hoped to then sell on the site with planning permission.

The application is due to be discussed by members of the borough’s planning committee next Wednesday and the recommendation of officers is that the application should be rejected.

That recommendation is likely to be accepted by the committee – when the original application was approved in early 2010, on the recommendation of officers, all the Labour councillors voted against.

Now Labour has a majority on the council, and the committee, and it would be a major surprise if any of them rejected the officers’ advice and backed the proposal.

The officers make the point in their 40-page report that the application is now purely speculative – with no occupier identified for the supermarket, hotels or other buildings.

And the application would damage attempts to improve the town centre.

The report says: “Whilst there are a number of positive urban regeneration aspects which would accrue if this development was carried out, it would nevertheless pose serious risks to the future planned re-focussing or expansion of the ‘high street’ and should therefore be refused planning permission.”

Ipswich Central has been urging the borough to reject the application to encourage development elsewhere in the town centre.

Chief executive Paul Clement said: “Ipswich Central has been against this development from Day One.

“If our local authority is poised to reject, it is to be congratulated. The site should be used as a prime residential development, not a retail scheme.”

Ipswich MP Ben Gummer said it was not clear why the revised scheme with a smaller supermarket should be rejected when an earlier attempt to build a superstore was approved.

He added: “If there can be a residential scheme brought forward to that site, I would support Ipswich Central’s position – but it is important that the site is not just left empty for many years.”

A Tesco spokesman said: “We are disappointed that the application has been recommended for refusal. “This proposal offers the potential for significant investment on this site and in Ipswich and we look forward to the planning committee next week”.