Tesco is to give Chatteris and Whittlesey £20,000 to say sorry for not opening new stores in the towns.

The deal has been struck by Fenland District Council and follows an earlier Tesco donation to Chatteris groups of £4,000 agreed with MP Steve Barclay after the store was mothballed.

Council leader John Clark said: “Residents were disappointed by Tesco’s decision so I am pleased that they have come forward with a community fund.”

He said Tesco has also promised to keep the Chatteris site clean and tidy “until a future use for it can be found.

“Discussions with potential alternative tenants for the store shell are ongoing and the retailer has committed to keeping the council and the local community updated.”

The £22million Chatteris store – which would have created 250 jobs -was one of 49 axed by Tesco as part of a cost cutting programme; it is reported to be paying £1million a year rent to the private equity fund that owns it.

In the case of Whittlesey, despite winning consent four years ago for a store in Station Road, not a single brick has yet been laid. Tesco also tried for a store in Eastrea Road but lost out to Sainsbury’s.

Cllr Clark and Fenland Council chief executive Paul Medd have held talks with Tesco officials and raised “key concerns arising out of the company’s decision”.

Cllr Clark said both he and the chief executive voiced the “anger and frustration” felt by many residents about the impact Tesco’s decisions would have on Fenland communities.

The council leader said the community fund would focus on small grants to local charities, groups and clubs.

“We are pleased that Tesco has agreed to support the idea of a community fund; they said they would be happy to work in partnership to help deliver this for the people of both Chatteris and Whittlesey.

Cllr Clark said in the case of Chatteris, Tesco will introduce “a regular and comprehensive maintenance regime” for the summer months, to include both collecting litter and cutting back any overgrown vegetation and plant life.

Fenland Council says it will “actively pursue” the valuation officer “to encourage a valuation to be made on the Chatteris side so business rates become payable to the council whilst it is vacant.”