Friends of the Earth campaigners have accused supermarkets of “crushing farmers” and killing off local shops in their evidence for the Competition Commission (CC) inquiry into the £120 billion UK grocery market.

The environmental organisation will call for a legally binding code that stops local authorities being “bullied” into granting supermarkets planning permission in inappropriate places.

The CC is investigating the 75 per cent market share of ‘big four’ supermarkets Tesco, Sainsbury’s, Asda and Morrisons.

The FoE stance comes as the third blow to Tesco since last week.

Will Chase, a former potato farmer who founded Tyrells Potato Chips, this week publicly refused to allow Tesco to sell his stock his product.

The supermarket chain was also criticised by the Advertising Standards Agency last week after its Bangor store in north Wales claimed to be selling local produce - when it was, in fact, sourced up to 174 miles away.