If approved by councillors, the new supermarket would be built within a half mile of Tesco’s massive new Extra store on South Road — which is due to open its doors in February.

It would see the two retailers go head-to-head for business from customers in Charleston, Menzieshill, Gowrie Park and Lochee.

The pair have previously clashed over new stores in Dundee having been at loggerheads three years ago about plans to establish new supermarkets in the city.

However, despite the obvious threat to their own interests from the new plan, Tesco confirmed today they would not raise a formal objection to any planning application lodged with Dundee City Council for the development.

Tesco regional corporate affairs manager Douglas Wilson said, “We don’t lodge objections to rival retailers planning applications.

“That is what the planning process is there for and council committee members will make their deliberations.”

The new scheme is still on the drawing board and a formal application for permission to redevelop the site is not expected to go before councillors for some time.

However, the £75million project — which is jointly being progressed by Asda, NCR and property investment group Macdonald Estates — would be difficult for the local authority to turn down because it would help stave off the effects of the credit crunch in an increasingly difficult financial climate.

The developers have dangled the carrot of at least 250 construction jobs during the build phase of the project and 650 permanent posts when the scheme is up and running.

A total of 480 of those positions will be within the new Asda and the remainder will be split between new retail outlets, offices and a 100-bedroom hotel.

The project would see the current NCR factory — which was all-but-mothballed in 2007 following swingeing job cuts — demolished and a new purpose built facility created on the southeast of the site to house the remaining workforce.