Tesco is in crisis talks with the Thai government in a bid to see through ambitious expansion plans.

The UK-based retailer had planned to open 170 new stores in the country this year.

But the Thai Ministry of Commerce has put a stop to international retailers opening stores until regulations have been put in place to protect small shopkeepers - by proposing a voluntary agreement that would freeze expansion until new rules were drawn up.

The retailers have reportedly refused to sign. A Tesco spokesman said: “We are waiting to see the details of the proposals.”

The retailers are due to meet with the Thai authorities again next week.

Tesco has already opened 200 convenience stores in the country, as well as 10 larger supermarkets, that compete with traditional Thai fresh food markets and shops.