The merger will create a new force on the High Street

The Office of Fair Trading (OFT) said the deal could go ahead as long as the combined firm sold stores in 100 areas where competition might be stifled.

Boots and Alliance Unichem welcomed the decision and said they would work with the OFT on the store disposals.

The merger will create one of Europe's largest drugs, beauty and healthcare groups, with sales of more than �13bn.

Boots and Alliance Unichem first announced their plan to merge in October.

The news raised fears that some communities would see competition between pharmacies reduced after the merger went through.

But the OFT said that the disposal of stores in about 100 areas would be enough to tackle competition worries.

"Boots has offered divestment undertakings for all of these areas and the OFT is satisfied that these will address its concerns," said Vincent Smith, OFT competition enforcement director.