The proposed development has a Debehams store at its centre

The report by consultants Scott Wilson is to be considered on Tuesday when new designs for the town's Cattle Market scheme are unveiled.

Andrew Varley, of St Edmundsbury Borough Council, said it confirms the project would help local traders in the Suffolk town to prosper.

"Without it, we would be set for a decline," he said.

The report warns that some businesses, such as smaller shops, may fail as traders move toward the centre of the town but they would be replaced by those of "similar and better calibre".

Nick Martin, town centre manager, says there should be a balance of shops in the area.

He said there are "great advantages" for both independent and large corporate retailers in improving the town's attraction to shoppers.

Outside competition

The report suggests that a failure to develop the town centre will lead to retailers choosing other locations.

Mr Martin added: "The group will need to be consistently on their guard to ensure that we protect the existing balance of shopping, which is such an outstanding feature of Bury St Edmunds."

The planned development will open in 2007 and will feature a Debenham's store, HMV, Waterstone's bookshop and an outlet for the clothes chain H&M.

Critics say a lack of car parking space is a major problem for the project.

It will be built on a site currently used for town centre parking.