The riverside site has stood empty since 1999

Sunderland's former Vaux Brewery has been the subject of a dispute between Tesco, which owns the land, and regeneration company Sunderland arc.

Both submitted plans and in March the government approved Sunderland arc's proposals for a �280m development including hotels, houses and shops.

Tesco's legal challenge should be heard in the High Court later this year.

The company wants to build a store, hotel and apartments at a cost of �150m and had previously hoped to strike a compromise with Sunderland arc.

Tesco's challenge to this decision will inevitably lead to more delays and more frustration David Walker, Sunderland arc

Max Curtis, Corporate Affairs Manager at Tesco, said: "We have taken this step reluctantly. As owners of the site, it is not in our interest to see it remain derelict and unused.

"We have long made it clear that we would prefer to work in partnership with Sunderland arc.

"Working together there is the potential to develop a world-class proposal for this derelict land at no cost to the public purse.

"We hope that the planning situation can be resolved swiftly and that the site can be developed for the benefit of the city."

David Walker, Sunderland arc's Operations Director claims the legal challenge will delay the brewery's regeneration.

He said: "The Secretary of State has given her backing to our plans for Vaux and we are currently working hard with our partners to ensure progress is made in developing this site.

"Tesco's challenge to this decision will inevitably lead to more delays and more frustration."

The former Vaux site has stood derelict since 1999.