by Nic Rigby BBC News Website, Norwich

Tesco had proposed building on the site of council-owned flats

The deal says only Tesco can build a supermarket on council-owned land.

North Norfolk District Council's cabinet will be presented with a report on the case - which will be made public at the end of the month.

The report is expected to conclude that the council's executive committee gave authority for the signing of the deal.

In a statement the council said the agreement did not involve planning officers or the planning committee.

Inquiry ordered

But the BBC has been told an officer, with the authority of senior councillors, signed the agreement with Tesco.

The agreement was signed between one administration leaving office after the 1 May elections in 2003 and the newly-elected members taking up their posts in the new executive committee.

A number of councillors and local residents who had opposed plans for a Tesco supermarket on council-owned land in Sheringham only heard about the deal three years later.

A Tesco spokesperson said: "It (the deal) precludes the council from promoting an alternative council-owned site for supermarket development but does not prevent the council granting planning permission to other retail developments on non-council land.

"It is therefore wrong to suggest that the agreement means that no other rival supermarket could develop a store in Sheringham."