Supermarkets are to face public shaming and huge fines if they use their size to force down prices paid to their suppliers, the Competition Commission will announce today.

The commission will recommend the appointment of a statutory regulator to judge pricing disputes between retailers and farmers, dairy companies, abattoirs, food processors and packers, The Times has learnt.

However, supermarkets have threatened to pass the cost of the new controls on to customers in higher prices, at a time when the cost of living is rising.

As part of the revolutionary proposals – dubbed “Offshop” – a competition test will be put in place before planning authorities can grant permission for a new store.

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Councils will have to take into account whether one supermarket chain is dominating an area – so-called “Tesco towns” – before granting the go-ahead for a new store.

The new ombudsman’s office is one of a package of measures to be announced today by the watchdog after a two-year inquiry into the £123 billion a year UK grocery market and the 75 per cent market dominance of the big four companies – Tesco, Asda, Sainsbury’s and Morrisons.

The current voluntary code will be extended to include other high street chains such as Waitrose and Marks & Spencer.

The new regulator is expected to have the power to name and shame, and fine companies guilty of sharp practices such as price cuts for unsold goods, charging new products for shelf space and pay-to-stay fees to keep goods on shelves.