A decision to uphold the granting of planning permission for a major £16 million retail scheme has been welcomed.

Durham County Council awarded permission to Quora (Peterlee) Ltd to redevelop the former East Durham and Houghall College site, in Peterlee, earlier this year.

However, Praxis, the owner of the nearby Castle Dene Shopping Centre, challenged the decision, requesting a judicial review.

The company has twice been refused permission for a review and subsequently lodged an appeal with the Court of Appeal in London.

However, the court has now turned down the appeal, backing the earlier legal rulings and the original granting of planning permission.

Durham County Council has welcomed the latest ruling, which should finally allow development of a site that has now stood empty for a decade.

Cllr Carl Marshall, the authority’s Cabinet member for economic regeneration, said: “The development of the former college site will provide a major boost to efforts to improve the retail offer in Peterlee and, hopefully, provide a catalyst for further developments in the town over the coming years.

“It is disappointing that the progress of the development has been delayed by the challenges brought by Praxis. However, the Court of Appeal’s decision is a vindication of our approach to the planning process and means work can now begin on the site.”

East Durham College vacated the site in Burnhope Way in 2009. It was subsequently purchased by supermarket chain Tesco, which was granted planning permission to develop the land two years later. However, the company subsequently withdrew from the scheme.

Future tenants of the new development, which is expected to create up to 120 jobs, include Lidl and Home Bargains.