Supermarket giant Tesco has abandoned plans to build a superstore on a site next to the Dreamland theme park in Margate.

Tesco has written to the site’s landlord, Freshwater Developments, to terminate its contract to operate the 82,000sq ft store on the seafront.

The retail giant, which has two smaller stores in the town, said its change of plan was the result of shoppers switching from large stores towards neighbourhood outlets and the internet.

In a statement, it said: "We are reducing the number of large stores we open each year as a result of changing customer shopping habits. After careful consideration we have therefore decided not to pursue a new large store in Margate."

Scroll down for kmtv's Dreamland report.

The Tesco application, which also included a 60-bedroom hotel, had been at the centre of controversy amid claims it would hit traders in Margate town centre and detract from the Dreamland regeneration proposals.

Thanet council said: “The council is positive about the future of the site given its proximity to the new reimagined Dreamland and the upwards trend of exciting regeneration in the area.”

Designer Wayne Hemingway told KentOnline earlier this week that the reopening of Dreamland will be a success because it is “in the right time and right place”, as details of the project go on display this week.

In an exclusive interview before unveiling plans for the revamped attraction, dubbed the Reimagined Dreamland, Mr Hemingway said the park has been inspired by the cultural revival of Margate.

Responsible for the design and branding of the long-dormant attraction’s revival, his company HemingwayDesign will reveal a park where “every little detail will be something which will photograph”.

The Dreamland regeneration project is working on a total budget the same size as the marketing budget of Blackpool and Alton Towers.

HemingwayDesign aim to take advantage of social media to market the park on a small percentage of the big boys’ budget.

Mr Hemingway added: “Every little detail will be something which will photograph. Every toilet seat and exposed wire will be touched by the creative hand of a designer.

“This will be the modern way of marketing. We will use modern methods to achieve a reach of four million on a fraction of Blackpool’s budget.”

More than 2.5m people visited Dreamland every year during its heyday in the 1960s, when Margate was seen as a cool seaside resort for London holidaymakers.