And frozen vegetable firm Pinguin Foods UK, which is giving up part of its 44-acre site on the Hardwick Industrial Estate to accommodate the supermarket giant, says Lynn could lose its status as the company's UK headquarters if the plans do not go through.

Pinguin Foods has signed a new 11-year lease with landlords and regeneration specialist Morston Assets giving the latter the chance to take control of 12 acres of the site nearest the Hardwick roundabout to enable the superstore to be built.

The superstore would be about two-and-a-half times the size of Sainsbury's Vancouver Centre supermarket and offer a wide range of products and services, including an in-store bakery, delicatessen, restaurant and a petrol station off Scania Way.

A tripartite agreement between Morston Assets, Sainsbury's and Pinguin Foods will help finance a new £7m link road for the Hardwick Industrial Estate, spending of £1.75m on other highways improvements there and a £7m investment in updating the Pinguin factory.

Yesterday, Sainsbury's regional development executive Robert Oxley told the Lynn News: "Planning applications are supposed to take 13 weeks to determine from submission - this has taken over a year and still has no decision.

"It is complicated and was going to take longer than the statutory time, but we feel it has been dragging along for some time and holding up the benefits it will bring for the community."

He said the Highways Agency had an input to the scheme because of the effect on surrounding roads but it had lifted its holding direction to West Norfolk Council planners "several months ago".

Sainsbury's had also now promised the council that there would be no downgrading of its town centre store, where about 150 full and part-time staff work, in line with customers' wishes.

With a further 300-plus full and part-time jobs being created at the superstore, Mr Oxley said: "We are frustrated because we can only see good news for the town from this scheme."

He pointed out that when the proposed development of the town centre around the bus station eventually takes place, Sainsbury's has said it will take a new store there too.

Morston Assets managing director James Bunn said: "We are very pleased that we have completed a further lease with Pinguin Foods UK - however, we are frustrated that the Sainsbury's application is no further forward.

"Should the applications for the superstore and link road not gain approval, we will not have the funds to proceed with our £7m investment into this prominent local employer's site.

"This significant investment will allow Pinguin Foods to modernise and update their production line which further enhances and secures the Lynn site as their UK headquarters."

He added: "The grant of planning permission for the proposed Sainsbury's store and link road will further enhance Morston's commitment to the regeneration of Lynn.

"We hope a positive decision on both planning applications is made soon, as this is an exciting and necessary development for the town and for the people who live here."

Mr Bunn said the tripartite deal would bring forward the long-awaited Hardwick Industrial Estate extension and help the borough council "fulfil its objectives under Lynn's Growth Point status, awarded by the Government in 2008".

Pinguin Foods managing director Peter Denolf said Lynn is currently the firm's main UK site, with about 300 people employed during the main season in sorting, packing, storing and freezing vegetables.

Further investment was planned in this site, linked to demolition of the offices and the freezing plant so that Sainsbury's could develop its superstore there and creation of a more modern and all-in-one factory for Pinguin's purposes.

But if the Sainsbury's scheme did not go ahead soon, he said: "We will have to look at where we spend that money because we have other sites at Bourne and Boston in Lincolnshire to consider."

Mr Denolf said the Lynn factory might then become a cold storage site only and have to relocate some of its workforce.

Borough council leader Nick Daubney was not available for comment, but a council spokesman said national planning policy changed over Christmas and the new information needed when considering Sainsbury's application was only received a fortnight ago.

A special development control board meeting last month was postponed and a meeting was due to be held with the applicants shortly.