Tesco is taking legal action for libel and malicious falsehood against Guardian News and Media and its editor Alan Rusbridger, over a series of articles in February this year and a podcast which the supermarket claims wrongly alleged it had avoided paying corporation tax.
Tesco claims the articles alleged it had contrived a tax avoidance structure including a series of off-shore joint venture partnerships to avoid paying up to £1 billion of UK corporation tax on sales of its UK properties.
It also maintains that the Guardian accused Tesco of having already avoided corporation tax on what it said were £500 million of profits from two property deals using that structure.
In a statement, Tesco executive director of corporate and legal affairs Lucy Neville-Rolfe said that Tesco regretted having to take legal action.
She said: "We had hoped that the Guardian would be able to accept it had made a mistake and apologies for what it had written, but despite our requests to them to set the record straight this has not happened. We feel driven to take this action because we cannot allow Tesco's reputation to be so seriously attacked with such wilful disregard for the truth. We support free and open debate about the role and conduct of business, so long as that debate is based on fact, not fiction."
A statement from Guardian News and Media said that it had offered Tesco meetings to discuss the allegations and the opportunity of a full right of reply.
It said: "Instead of frankly explaining their position or engaging in a public dialogue, Tesco has taken the extraordinary step of suing for libel in a clear attempt to close down the debate and discourage others from looking too closely."