Manchester-based tycoon John Whittaker has been given planning permission in principle for a retail development, 30-storey housing office tower, cinema and casino, 200-bedroom hotel, bars and restaurants.

House of Fraser, John Lewis and Debenhams are opposing the development, arguing that it will drive down city centre trade, and the stores have been backed by two of Scotland’s largest shopping centres, Buchanan Galleries and the St Enoch Centre.

However, Glasgow City Council said it was satisfied that any impact on trade would be minimal, although it said a “cautionary” approach would be taken towards any future out-of-town developments.

Councillors voicing support for the plan argue that similar concerns were raised several years ago over the impact of Buchanan Galleries on the “Golden Z” district of Argyle Street, Buchanan Street and Sauchiehall Street.

Councillor Alex Glass said the development would enhance Glasgow’s reputation as the second top retail destination in the UK. He said: “When Buchanan Galleries were built fears were raised that it would have an adverse effect on Glasgow’s three main shopping streets, but this has not happened.

“What it did do was make Glasgow a more attractive retail destination.

“This development will also provide much-needed facilities for the homeowners who have invested in Glasgow Harbour and help address some of the issues from the 1960s and 1970s concerning periphery estates which were built without the infrastructure to support them.”

However, the decision to approve the 25,805 sq metre development has angered retailers, who say it will drive out shoppers from both the city centre and smaller areas such as Byres Road and Partick.

Lesley Ballantyne, managing director of John Lewis Glasgow, said: “We’re extremely disappointed with today’s decision.

“Given the current economic climate, there is no doubt that an additional development will impact city centre retail and leisure businesses and pose some risk to the future success of John Lewis in Glasgow.

“Glasgow City Council has shown recent support for the city centre through a number of initiatives. Retailers will be looking for that support to continue so we can create a compelling and exciting city centre experience for our future visitors.”

Two neighbouring local authorities, Renfrewshire and West Dunbartonshire, have also objected to the plan, as has nightclub chain Lynett Leisure.

A Lynett Leisure spokesman said: “We are disappointed in the decision and believe the development will take more people out of the city and local town centres such as Byres Road and Partick.

“Glasgow has more shopping malls than London, with only half a million people compared to 5 million.”

The decision will now be referred to the Scottish Government as a result of the council being a stakeholder in the plans put forward by Whittaker’s Peel Holdings, which owns Manchester’s Trafford Centre.

Glasgow Harbour managing director Euan Jamieson said: “We are delighted to receive this planning consent, having worked closely over a long period with city planners on the revised application.

“We will now study the terms of the consent carefully and fully understand the conditions attached prior to making further comment.”

Outline planning permission was also granted yesterday for a hotel and office development at Lancefield Quay.