Wal-Mart's UK supermarket chain Asda has stepped up its lobbying for a relaxation of planning laws, the Observer newspaper reported.

It is urging the government to change the test used by competition authorities so that it can open new space to compete directly with Tesco, the paper said.

Representatives have visited the Deputy Prime Minister's office, Number 10 and the Treasury to push for the 'adequate provision' test to be amended to 'adequate competition' to overturn 'first mover advantage' - which has effectively meant one superstore is permitted, then no more.

However on the day chief executive Andy Bond announced 1,400 job cuts, he said space is not significant for Asda's growth plans; the retailer has plenty of scope for organic growth as well as potential for new stores.

'We are very excited about the Asda Living stores,' said a spokesman. There will be five by the end of the year, with Byker in Newcastle and Thurrock, Essex, due by Christmas. There will be 10 standalone George stores. Asda last week announced that the OFT had approved its acquisition of 12 'convenience' sized stores in Northern Ireland.

Asda, alone among the big four supermarkets, lacks a joint venture agreement with a petrol retailer - M&S has announced a joint venture trialling eight stores with BP, formerly partnered by Safeway. But it is understood that Bond has not ruled out using space in ways that attract customers who are younger than its stores' traditional clientele. A spokesman declined to comment.