Council officers are to hold talks with Asda after plans to build 133 homes and a multi-storey car park on a town centre car park were refused.
Wellingborough councillors went against their planning officers to turn down a bid by Keepmoat Homes to build on Jacksons Lane car park, off High Street.
It came after Quora Development Ltd made a formal rival bid for the council-owned site, to build a 35,000 sq ft Asda, a car park and a care home.
Martyn Johnson, partnerships project manager at Keepmoat, said: “We are shocked and disappointed by the planning committee’s decision to refuse these proposals which would have helped transform this area of the town and delivered much-needed new homes and facilities.
“Keepmoat has worked in partnership with the council over the past 18 months to deliver this project on their behalf and end years of waiting for this site to be regenerated. We have consulted with the local community and stakeholders and developed proposals that had the full support of the council’s planning officers.
“We will now take time to review the decision made by councillors and consider our next steps for the project.”
A Wellingborough Council spokesman confirmed talks with Asda would now start, saying: “Officers have initiated contact with Asda with a view to meeting in the near future to clarify their plans for Wellingborough.”
Speaking at the meeting about the deision to refuse the homes plan, Cllr Tim McGuire said: “It’s not really what I want to see in our town centre. We’ve got to get this right.
“I don’t want to look back in a few years and think I made a decision to build an eyesore. I want the best for this borough.”