The High Court has ordered a judicial review of the amount of retail space already built at Dalton Park by ING-owned developer London & Amsterdam.
Shopping centres in the Northeast have mounted a legal challenge to the size of Dalton Park factory outlet centre in Co Durham.
More than 11,000 sq m of space was built after Easington District Council twice approved increases to the 9,300 sq m of retail allowed originally.
The legal action against Easington District Council was mounted by Prudential, Realm, and Peterlee Shopping Centre owner Peterlee Partnership. The challenge is expected to result in a full High Court hearing later this year.
Bob Mogford, director of shopping centre investment at Prudential Property Investment Managers, said: 'Our complaint lies in the fact that the Secretary of State granted permission for a maximum retail content of 9,300 sq m.'
London & Amsterdam had sought a 50 per cent increase to the park's retail space, but withdrew its plans in the face of opposition from Prudential and other local landlords.
Last November, Easington District Council approved a 10 per cent increase to Dalton Park's retail space. A further 10 per cent increase was approved in March. Prudential argues both decisions were unlawful.
A spokesman for ING said: 'ING is convinced Easington council followed planning procedures.'
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