Tesco has admitted to approaches to buy its factory land off them as the site’s co-owners readies an application for houses.

A spokesman for the supermarket giant said it is ‘reviewing options’ on its Ottery interest, after failing with its own application to build several years ago.

The completion of a Sainsbury’s store elsewhere in the town seem to put paid to Tesco’s chances of developing their land at the former Switchgear factory, and it has confirmed there is interest in taking the land off their hands.

Paul Conway, the managing director of the firm which owns the other part of the site, confirmed he was just putting the ‘finishing touches’ to a new application for homes last month.

East Devon District Council (EDDC), who will make the decision on any plans, has made no secret it would prefer a proposal which would see the entire site developed for use.

And Tesco confirmed Churchill Property Group has been in talks over the remaining portion of the land.

Its spokesman said: “Tesco is reviewing options for the site in Ottery St Mary.

“We continue to have dialogue with the adjoining landowner and other parties who have expressed an interest in the property.”

Mr Conway, who confirmed in a letter to Ottery Town Council the new proposals were imminent, has not yet revealed any details about the new plans.

A previous scheme in 2009 in conjunction with Tesco to create 100 homes as well as a supermarket was hampered by a public backlash, and was rejected by EDDC.

The developer said he wanted to submit a fresh plan based on a different concept by the end of 2011, but issues over sewage had seen the scheme stall.

South West Water said they would block any proposal with Ottery’s sewage treatment plant already at capacity, but it looks as though those issues may finally have been ironed out.

Tesco’s spokesman also moved to dispel rumours it was looking to acquire any other property in the town for development at this time.