Supermarket giant Tesco has lost its appeal against Barnet Council's refusal to allow one of its Express stores to be built in Finchley.

Opponents of the proposed shop, which had been earmarked for a site in Ballards Lane, halfway between Finchley and North Finchley town centres, say Thursday's decision will save small shops and help rejuvenate the two town centres.

The council turned down Tesco's application in December 2005 to open a new shop in what used to be a discount carpet store at 204-206 Ballards Lane, on the grounds that it would lead to the potential loss of other small businesses, which would have a negative impact on the vitality or viability' of North Finchley and Finchley.

Tesco appealed the decision, but on Thursday a Government inspector dismissed the appeal, ruling Tesco had failed to demonstrate the areas needed another convenience store.

The inspector, Raymond Michael, also threw out Tesco's appeal because he agreed with the council's assessment.

Jivan Dhokia, owner of A To Z Grocers which, at 175 Ballards Lane, would have been only moments from the proposed Tesco, said he was really pleased'.

"I think the inspector made the right decision," he said, adding big supermarkets were ruining small businesses. "It's not on. I was definitely worried."

The Finchley Society, which had expressed concern, was similarly jubilant. President Bill Tyler said: "It's a victory for local shopkeepers and shopping parades."

Brian Coleman, cabinet member for community safety and community engagement, said: "This is a victory against the odds. Tesco has enormous resources to fight appeals and almost never loses.

"I'm delighted that we have shown that local councils can stand up to huge retailers. The inspector has upheld our decision to protect the individuality of our town centres and this is cause for celebration."

A Tesco spokesman said: "This is a local decision which does not reflect a general trend as we usually find that a variety of other shops can trade well alongside our own. They can benefit, too, from the extra customers we bring to the high street.

"It is a shame that Finchley residents won't benefit from our great value range of products and convenient opening hours."

It was too early to say what the supermarket's next move would be, the spokesman added.