The High Court has dismissed an appeal for a judicial review by Derwent Holdings into Lancashire County Cricket Club and Trafford Council's plans to redevelop Old Trafford.
Derwent, owner of the nearby White City retail park, now has two weeks to seek leave to appeal. Derwent is controlled by an off-shore Bermuda trust owned by Albert Gubay, who made his fortune from Kwik Save and Total Fitness.
At a press conference in Old Trafford on Thursday, Jim Cumbes, chief executive of Lancashire County Cricket Club, said the club had incurred costs of £1.6m on legal fees and other advice in getting to this stage. The club has also lost £2m from the North West Development Agency and £1m from Sport England for indoor facilities due to deadlines for grant programmes expiring.
Work on the £32m redevelopment of the ground and the 100,000 sq ft Tesco will start as soon as the appeal period passes, barring further intervention from Derwent.
Jim Cumbes, chief executive of Lancashire County Cricket Club, said: "This is a historic moment for Old Trafford, as it will ultimately secure the future of international cricket in Greater Manchester and the North West as well as enabling us to fulfill our promises to local schools and the local community at large."
Cumbes called Derwent's actions a "thorough nuisance" but was confident the lost grant funding could be replaced from alternative sources.
The club, Tesco and property partner Ask Developments hope to complete the new ground, store and community facilities by April 2013. Lancashire will ask the England & Wales Cricket Board to reconsider the ground as a base for the 2013 Ashes series between England and Australia, the club having been dropped from the international roster in recent years. Two new grandstands and a refurbished Pavilion will ensure a capacity of 15,000, capable of rising to 25,000 with temporary seating.
The £32m phase is part of a £70m overall development that includes the completed The Point conference suite and stand and a proposed extension of the hotel, set for a later phase.
The NWDA's funding fell from £7.2m to £5.2m during the planning and legal process, Cumbes said. Tesco's contribution is a £21m cross-subsidy and Ask does not have equity in the project, acting solely as a development manger.
The club will play many of its games this year at Liverpool, Southport and Blackpool while the pitch is rotated and stands demolished.
Cllr Matt Colledge, leader of Trafford Council, said: "This decision helps support the future of Lancashire County Cricket Club in enabling them to bring their ground up to Test Match standards and therefore giving them a fighting chance of securing the Ashes in 2013. This will not only benefit this borough in terms of our tourism economy but will also ensure there are first-class sporting facilities for future generations."
Drivers Jonas Deloitte act as advisors to Lancashire County Cricket Club.