The decision came after careful consideration of rival regeneration proposals from Sainsbury's and Tesco.
By a clear majority, members approved planning applications from Tesco for a supermarket and for residential development on land within the Regeneration Area off Harbour Road, owned by Tesco.
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Again by a clear majority, they refused a proposal by Sainsbury's for a store on EDDC-owned land in the northern part of the Regeneration Area.
Members also approved an application from Axe Riverside Company for a residential development offering 90 apartments and including 36 affordable units along the riverside.
Councillor Mrs Steph Jones said: "We need to focus on which application will deliver the best for Seaton in terms of economic growth and restoring the vitality and viability of the town and not the companies who are the applicants.
"It does however need to be stated that the [Southern] application site is within the ownership of the applicant and without some kind of development taking place on the regeneration area it is very unlikely that the wider 'Seaton Regeneration Area' and the aspirations for the area and the town will be able to be delivered viably."
(CD/KMcA)
