Borough council bosses have threatened to take legal action against the Co-op if the company opens the doors of a new shop in a former Northampton pub.
Last year the more than 550 people sent letters to the Guildhall urging Hawthorn Leisure not to sell the Barn Owl pub in Olden Road, Rectory Farm, to the Co-operative group.
Councillor for the area James Hill led a campaign asking for the authority to enact a 1980s covenant that appeared to protect the pub from being turned into a Co-op store.
The move won the support of a number of his Tory colleagues but put him at loggerheads with the then leader, Councillor Mary Markham, who ended up resigning from her post over the matter. She said the move could have left the council facing legal bills of up to £200,000 and stood down on principle.
Despite the protests, the Co-op group was granted planning permission to convert the former two-storey nightspot into a mini-supermarket in April 2016.
But with the renovation now all but complete the borough council is threatening to sue the Co-op if it opens the shop.
A spokesman for the council said: "Following development activity at the former Barn Owl pub in Rectory Farm, Northampton Borough Council has contacted solicitors for the owner, Hawthorn Leisure, and the Co-Operative Group warning that the building’s covenant remains in operation.
"The covenant was introduced to secure a mix of uses for the general benefit of the surrounding estate and forbids its use as a convenience store as one already exists in adjacent premises.
"In letters to both parties, the council has made it clear that legal enforcement will be considered if a convenience store is opened at the former pub building in Olden Road."
Council leader, Councillor Jonathan Nunn, added: “We have said all along that we would consider taking legal action in respect of the covenant on the Barn Owl and that remains the case.”
Legal papers issued to the Co-op from the council state that the covenant will only become active when "any convenience store on the premises commences trading."
It is understood the store has already begun recruiting and is due to open in June.
Should the Co-op open the doors of the new shop the council has threatened to seek a declaration from the High Court on whether the covenant is enforceable.
The Co-operative Group has been contacted for comment.
Councillor Hill said he hopes the move by the borough council will force the Co-operative Group to strike a deal with the authority.
Last year there were hopes Hawthorn Leisure would keep one room available for community use. But so far there have been no firm assurances on this.
He said: "I'm delighted that the borough council is continuing to support the residents in what they committed to last November.
"I'm hoping Hawthorn Leisure will come back and speak to the borough council again to make an offer."