NEIGHBOURS celebrated last night as Tesco lost its appeal to transform a derelict Oxford pub into a new store.

The supermarket chain wanted to build an Express shop on the site of the Fox and Hounds pub in Abingdon Road.

The plans were fought by residents, nearby shopkeepers and Oxford City Council rejected the plans twice.

Now an independent Planning Inspector Olivia Spencer has dismissed the appeal, which could mark the end of the road for the supermarket’s plans.

City councillor for Hinksey Park Oscar Van Nooijen said he was “delighted”.

He said: “The people of south Oxford want a development which makes best use of this site, but doesn’t create traffic havoc.

“I’m really looking forward to seeing a proposal we can support, so we can finally get this sorted out and provide much-needed housing and even some extra shops for the area.”

The plan had been to demolish the pub to create a store and four flats with 16 parking spaces.

Tesco had first applied for a two-storey store with no flats, but this was refused in August 2010. It did not appeal.

Residents raised concerns about increased traffic and loss of nearby shops, one of which houses the nearest Post Office.

Oxford City Council spokesman Louisa Dean said: “If Tesco wish to pursue their development aspirations for the site, they would have to start the planning process over again, which may include pre-application discussions with officers and the submission of a fresh planning application.

“In exceptional circumstances, an unnsuccessful applicant can challenge the planning inspector’s decision in the courts.”

Sub postmaster at Nisa Local Mohammad Afzal said: “People were set against this and wrote against it and justice has prevailed.”

The Rev Jane Sherwood from nearby St Luke’s Church said: “I hope they give up now. I think the whole site should be developed into housing and maybe a small retail unit.”

It is now up to Tesco to decide if another planning application should be submitted with the council.

Planning inspector Ms Spencer said there were too many proposed car spaces and criticised the main entrance to the shop being on Weirs Lane.

Tesco spokesman Melanie Chiswell said the company had no comment.

An appeal for a similar store in the former Friar pub in Old Marston was upheld by the Planning Inspectorate last month.