An application for a 24-hour out-of-town Asda supermarket near Leeds has been rejected by councillors on the basis that it would harm a local town centre.

Asda had submitted proposals to build a 25,000sq ft supermarket, petrol station and 265-space car park to the north east of Wetherby, which is home to an existing Morrisons supermarket in the heart of the town. The grocery multiple has promised to create up to 200 jobs in the process.

But a Leeds City Council planning panel rejected the Asda application “for a number of reasons”.

“The proposed site is very remote from Wetherby town centre and would have a harmful effect on Wetherby by drawing shoppers out to the supermarket, rather than staying and shopping centrally to the detriment of existing traders,” a spokeswoman said.

“It was simply not a sustainable option for the town, and therefore on this occasion the application has been refused.”

Local retailer Nish Kanabar, board director of Castlegate Family Stores, said the supermarket would have “squeezed the life” out of the town centre.

“Asda’s own retail impact survey suggested it would’ve taken away 25% of town centre trade. In reality it would probably be up to 35% as they’d play down the figures,” he added.

A petition opposing the proposals was signed by 1,094 people, although a rival supporting petition attracted 1,379 signatures.

But Nish said Asda had hired a marketing company to conduct the other petition, which did not directly address the issue.

“Our petition was specific. It asked, ‘do you want Asda?’. The other one asked people if they wanted more variety and cheaper prices.”

He said he was confident that Asda would not appeal the decision, especially given the council committee voted 11-1 against the plans.

A spokeman for Asda said: “Clearly, we are disappointed by the decision. Whilst our application was recommended for refusal by council planning officers, we had hoped councillors would recognise the need and widespread support for a new Asda supermarket in Wetherby.

“The rejection of our plans will be of great concern to many families in Wetherby who were looking forward to shopping at Asda and taking advantage of our excellent customer service, great product choice and low priced petrol.

“We will now consider our next steps on this application.”