The Island House was originally built as a Quaker School

The Island House is set to make way for a shopping complex, which Carmarthenshire council said was vital for the town's future prosperity.

But a petition has been signed by 250 people. The landlords claim the plans could go ahead leaving the pub intact.

All but one of the nearby buildings have been levelled and legal powers could be used to buy it if talks fail.

Upper Park Street in the town has been flattened in readiness for work on the multimillion-pound development, which will include new shops, leisure facilities and a public square.

The council has opened negotiations to buy the pub and an estate agents office to complete the site.

At a meeting on Monday senior councillors gave permission for a compulsory purchase order (CPO) if necessary.

It's our home as much as our business John Nurse and Vicki Halliday

Landlords John Nurse and Vicki Halliday said they had received plenty of support in their fight to stay put but were not optimistic.

"It was originally built as a Quaker School over 200 years ago although we are not sure when it was then turned into a pub," said Mr Nurse.

"The building is in reasonably good nick. It's a landmark - one of the oldest buildings in the town."

He said it was once listed but lost its protected status when a previous landlord replaced the original windows with UPVC.

Ms Halliday added: "It will be a sad day if it goes and we have had people walking in off the street to sign our petition."

But the council's executive board member for regeneration Clive Scourfield said the new development was important to the future prosperity of Llanelli.

"People have waited many years to see this part of the town regenerated and it is vital that the timetable is not compromised," he said.

"Negotiations are ongoing and we hope the matter will be resolved.