Everton Football Club (EFC) and Tesco have been left "bitterly disappointed" at a decision to reject plans for the transformation of Kirkby, Liverpool, which would have included a new 50,000-seat stadium.

Communities secretary John Denham has blocked the scheme, following a public inquiry held between November 2008 and February 2009 in the wake of Knowsley Council's decision to approve planning permission.

In addition to the new stadium, proposals for the Destination Kirkby scheme also included improvements to the town centre, new leisure facilities, a new Tesco Extra superstore, office space and a housing development.

EFC chief executive officer Robert Elstone said: "Obviously, we are all bitterly disappointed with the decision as we felt that - along with our two partners - we had compiled and presented a most compelling case for the Destination Kirkby project.

"We will now regroup and carefully consider the options which are open to us. I feel I must stress that we do remain totally committed to finding a new home for our football club. The hunt for that new home will now intensify."

Knowsley Council leader Ron Round added: "We are currently digesting the detail of the decision note and will in the coming weeks be looking at a way forward for the town."

In November 2008, EFC warned that it was critical the public inquiry found in favour of the proposals due to the significant impact the scheme could have had on the club's finances.