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An artist's impression of the proposed 50,000-seat stadium
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Everton's hopes of moving to a new stadium in Kirkby appear to be over after the government rejected a planned £400m development according to reports.
Communities secretary John Denham is expected to announce his decision imminently, possibly on Thursday.
But it is understood that he has already made his ruling.
Everton are refusing to comment, but local MP George Howarth said: "I regret this decision in a time of significant economic challenge to Merseyside."
The development would have seen Everton move from Goodison Park in Liverpool to the 50,000-seat stadium in Kirkby as part of a complex with a Tesco superstore and other shops.
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606: DEBATE
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But, following a public inquiry earlier this year, Denham has decided that the move would breach shopping policy which discourages major supermarket chains from taking business away from town and city centres.
The move was expected to bring up to 7,000 jobs to the town, which is a suburb of Knowsley.
Knowsley Council were unavailable for comment, while a Tesco spokesman said: "We have not been formally notified yet, but we are expecting to be told in the morning when we will be able to comment."
Ian Morris, of the Kirkby Residents' Action Group, who opposed the move, said: "That is brilliant, it is fantastic news.
"The club have a major problem with no new stadium and will have to look at redeveloping Goodison.
"But our campaign was never about football, it was about the town we live in.
"We believe the football stadium would have destroyed our town.
"Kirkby is only a small town and they were talking about a 55,000-seater stadium built right in the town with a huge retail development which we thought was inappropriate.
"It would have had a major negative effect on the retailers working in the existing town centre.
"The stadium would have disrupted everybody's lives every time there was a football match."
Everton, who had already lost one planning battle when hopes of raising £10m through the redevelopment of the club's training ground for housing were dashed in January, were set to contribute £78m to the scheme.
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