The Government has agreed to change the planning laws clearing the way for furniture stores such as Ikea to open in Ireland. The Cabinet today decided to remove a limit on the size of retail outlets in certain designated areas. The move has been criticised by small retailers.

Plans by Swedish furniture giant IKEA to open an outlet in Ballymun in Dublin have been stymied by planning regulations which put a 6,000 square metre cap on shop size - most IKEA outlets are four times bigger.

But today the Cabinet approved a plan to remove this upper limit - but only in Dublin and the eight gateway towns identified by the National Spatial Strategy, in areas designated for urban renewal.

The move will not affect grocery shops, only those selling durable goods.

But Opposition parties claim the move could destroy existing jobs and cause traffic chaos on the M50:

Environment Minister Dick Roche today denied that he was setting policy to suit one company, but pointed out that if change was not made, Ikea could open up in the North instead.

Ikea has made no comment on the news as of yet, but the Swedish company is now expected to go ahead with plans to build a superstore in Ballymun.

ISME has strongly criticised the Government decision to remove the cap on retail planning guidelines, describing it as a direct attack on smaller indigenous retailers and suppliers.

'The decision is shortsighted and will have serious ramifications in terms of small business, leading to company closures and job losses,' it warned in a statement this evening.

RGDATA, who represents retail grocers, said the change 'set a bad precedent and would cause serious concern to the thousands of Irish businesses that had invested in genuine urban regeneration'.

The Chairman of The Competition Authority, John Fingleton, said the move was a positive one for Irish consumers and will lead to greater choice and lower prices.