The Tithebarn project, with luxury flats and shops including a John Lewis department store, may "suck in" trade from Fylde and Wyre.

Small shops across Kirkham, Lytham and St Annes have been expressing their fears as building work on is to start in two years time on the project.

John Strong, chairman of Lytham Chamber of Trade, says business is already declining in the affluent town.

He said: "We need something to revive trade in the town centre.

"This is going to take trade away from the town because it certainly can't bring it here.

"It's not going to be good for any of the towns. Anybody who says differently is stupid."

Those fears are shared by traders in rural Fylde, who have recently fought off plans for a huge, new supermarket and retail development.

Elaine Silverwood, who represents Kirkham traders, said: "People are worried about it.

"Kirkham has competition from Preston already. This will put an extra strain on our town."

However, John Moxham, chairman of St Annes Chamber of Trade, believes Fylde's traders need to aim for a "different market" from major shopping centres.

Concerns

He said: "It is far better if Kirkham, St Annes and Lytham concentrate on what they are good at. I don't think they can try and compete with Preston or Blackpool."

Plans for the massive development, which will include 100 shops and 20 restaurants and cafes, were presented to Fylde Council on Thursday.

Town hall chiefs will now meet neighbouring Blackpool, Wyre and Blackburn council's to discuss shared concerns over the scheme.

Blackpool Council officially objected to the Tithebarn project last December.

The resort is hoping for its own shopping boost with the opening of the £30m extension to the Houndshill Centre, including the new Debenhams store later this month, and is hoping to attract private investment to the £285m redevelopment of the Talbot Gateway.

Regional planning strategies say that Preston, Blackpool, Blackburn and Burnley should all have broadly equivalent status in terms of attracting economic growth.

And Russ Forsyth, leader of Wyre Council, says the authority will be keeping a "close eye" on the development.

He said: "I think there is a natural concern in all areas when you are going to get a dominant shopping complex going into one place.

"It will naturally suck in trade from other areas.

"We need to see what impact it will have on this part of the local area."

Preston City Council leader Ken Hudson has vehemently defended the scheme stating it will bring knock-on regeneration benefits to the whole of Lancashire.