Liverpool City Council and developer St Modwen will challenge Tesco's attempt to seek a judicial review affecting the £150m regeneration scheme in Great Homer Street.
Following its planning application for a standalone foodstore, which was turned down by government last year, Tesco launched a legal challenge which will further delay the delivery of the Project Jennifer scheme. Tesco had originally been on board to anchor St Modwen's scheme but withdrew in 2008 and was replaced by Sainsbury's.
Tesco is arguing that the planning inspector's recent decision to reject its plans was wrong on a point of law.
Michelle Taylor, regional director of St Modwen, said: "We are extremely frustrated and dismayed that Tesco has taken this action.
"The planning inspector made it very clear that the Tesco scheme would not deliver the regeneration the area so badly needs, which St Modwen and Liverpool City Council have maintained throughout the course of the project.
"This will be a major blow to the community. It was only last week that we held a meeting with local people and told them that we could move forward with the delivery of the scheme. There was clear relief and enthusiasm that the project could get going and we had set out our timescales for development.
"Unfortunately, these timings will now have to change and we are extremely disappointed that the much anticipated regeneration of north Liverpool has been delayed once again."
Cllr Peter Millea, Liverpool City Council's executive member for assets and development, added: "This news is exceptionally frustrating. Regeneration in Liverpool has made massive progress in recent years, attracting major new investment to the city. We are very disappointed that a company which has a good track record of investing in Liverpool should put its commercial interests in the way of one of the city's most important regeneration projects.
"Tesco had the opportunity over many years to be part of this and chose not to. Sainsbury's has stepped in to do what Tesco would not. The City Council, St Modwen, Sainsbury's and others will robustly contest this challenge and will make every effort to ensure that Project Jennifer goes forward, delivering the scheme that the community and the city wants to see."
Sainsbury's committed to taking a 110,000 sq ft store in the scheme, situated between Great Homer Street and Scotland Road. The proposed plans will make it the largest superstore in the city.