Outline planning permission was granted to build 454 homes and a 24-hour Tesco supermarket in Bromley-by-Bow, Tower Hamlets.

It also gave the retailer detailed planning permission to remediate land for a new school and public space, which will then be handed over to the London Borough of Tower Hamlets to begin building.

The 11-acre site will boast 18 other stores around a pedestrian high street that will be also home to a 90-bed budget hotel.

As part of the development deal, Tesco will build a library, called Idea Store, for the community and is expected to retain freeholds.

Some of the site, which is located close to the main London 2012 Olympic revenue, is the headquarters of scaffolding contractor TRAD.

Steve Oakes, LTGDC’s development director, said: “Securing this major investment will act as a catalyst for the sustained renewal of the area.”

The main part of the scheme, which has been criticised by design watchdog the Commission for Architecture and the Built Environment, is due to be completed by 2012.