The Competition Commission is to investigate Tesco's purchase and demolition of a supermarket close to its highly successful Slough store. Daily Telegraph

The investigation could result in the closure of the Tesco Extra in Slough – now one of the largest Tesco stores in the country.

The Offics of Fair Trading had been investigating Tesco’s purchase of a Co-op store in 2003 less than a mile down the road from the Tesco Extra. The retailer traded from the store while it extended its Slough hypermarket.

The OFT began a probe and was told Tesco would sell the store to a rival, but it was demolished and the retailer had plans to replace it with a store almost half the size.

The OFT asked the Competition Commission to intervene yesterday after talks with Tesco broke down.

A spokesman for the Competition Commission said: 'If we end up looking at divestment, one of the possibilities is that we could ask Tesco to dispose of its existing store,'

Lucy Neville-Rolfe, executive director for corporate and legal affairs at Tesco, said: 'This is a perverse outcome of the competition rules. It will create further delay and uncertainty for shoppers in Slough. We have always intended to redevelop and sell the Co-op and that remains our intention. Even the suggestion that we could have to sell the Extra store is quite bizarre and would be entirely disproportionate .'