The FPB understands that around 200 firms will have to find alternative premises before the diggers move in, which could be by 2010. ESG Herefordshire Ltd, the company set up by the council to deliver the regeneration, says it has held rigorous consultations with businesses and the public. However, at a meeting last week, many of those affected by the plans disagreed.

"At the moment, nobody is being told what they're entitled to," said FPB member David Llewellyn, of Llewellyn Heating. Facing a possible compulsory purchase order, Mr Llewellyn, who had planned on building a showroom and training centre, enlisted the help of the FPB's affiliate surveyor, Sedgwick and Co, to help him fight for compensation.

"We have had two independent valuations of the property," he added. "Both valued it at nearly treble what the council has offered. If we are forced to move, we want a fair and honest valuation, as well as adequate compensation."

During the meeting, on Thursday, 15 November, Jonathan Bretherton, the Chief Executive of ESG Herefordshire Ltd, said that land would be acquired by agreement wherever possible. However, he admitted that compulsory purchase orders would inevitably be imposed on some businesses.

"This is an incredibly emotive issue, and so it should be," he said. "The move is affecting peoples' livelihoods and I would feel exactly the same if I was on the receiving end of it."

Mr Bretherton insisted that 48 firms would be initially affected by the combined retail and link road element of the development. Overall, around 100 acres to the north of the city are to be redeveloped.

"That is 48 businesses too many," he said, "but you can't do this without breaking a few eggs," he added. "Ultimately you can't deliver these city centre schemes without resorting to compulsory purchases."

The council has offered alternative locations, such as the Rotherwas industrial estate and Three Elms trading estate, but the Grid's business owners - who have set up an action group opposing the development - believe that they are inadequate. FPB member Andrew Sanders, of Station Autos, said that moving outside the city centre would effectively mean starting again.

"If we were to move to Three Elms, which is on the outskirts of Hereford, it would mean completely re-establishing the business from scratch," he said. "It would make me very nervous about trying to carry on at the same size as we are now. We have estimated the costs of moving at about £120,000 – which does not consider the disruption to our business – so I would be looking for these costs be covered and then want discuss reasonable compensation with the council."

Voicing members' concerns at the meeting, the FPB's Campaigns Manager, Matt Hardman, asked Mr Bretherton and the panel of officials why there had been a lack of consultation with local businesses before the project's master plan had been drawn up. He also asked if the council had properly assessed the impact of the development on these firms.

"Regeneration per se is not necessarily a bad thing," he said later. "However, it needs to be carried out with the full support of the business community, not in spite of their wishes. This is about the survival of their livelihoods. Profitability and employment are also at stake, and the FPB believes that adequate and fair compensation should be the very least they are offered."

The FPB, which is campaigning against the decline of the UK's high streets and small, independent shops, supports the inquiry set up by Brian Binley, the Chairman of Conservative Party's Parliamentary Enterprise Group, into issues such as the practises of large retailers.