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The leader of Islington Council is calling on Ocado chief Tim Steiner to drop plans for a major distribution hub due to be built next to a primary school of 500 children.

Council leader Richard Watts’ demand that Steiner withdraw the online retailer’s plans for the Islington hub came after Steiner denied Ocado had gained planning permission for it by stealth.

Speaking to analysts at the launch of Ocado’s annual results last week, Steiner said: “We were very transparent about what we were doing on that site and anyone who suggests otherwise is being mischievous."

He added: “There’s nothing hidden in our planning application, which was made openly and distributed to all local participants. Some may have missed it but that wasn’t our doing.”

Watts slammed Steiner’s claims this week. Responding on Twitter, he said: “As leader (of Islington Borough Council) I can categorically say this isn’t correct. The use of a certificate of lawfulness submitted by the landlord, followed by a failure to run a consultation and relying on the planning process, and then concessions limping out. Mr Steiner should withdraw.

“We are proud of the work we are doing to tackle the climate emergency and clean up air quality in Islington, and this development would completely fly in the face of it.”

The Islington hub is Ocado’s first in inner city London. It is part of a major strategy to launch 500 city centre hubs across the UK as it rolls out Zoom, its one hour grocery delivery model.

Permission for the hub was obtained in April last year through an application for a Certificate of Lawfulness, made by landlord Telereal Trillium, which made no reference to Ocado in its submission.

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The hub, which is to be built just metres away from Yerbury Primary School in Islington, on the Bush Industrial Estate, will contain three diesel refuelling pumps located 30 metres from the children’s playground and will generate 400 van journeys and 12 LNG HGV journeys to and from the hub each day.

Watts has joined local campaigners to call for the plans to be ditched on the grounds that the hub’s proximity to the school will endanger the children’s immediate and long-term health.

Campaigners are also planning to target M&S which signed a major distribution deal with Ocado, which will begin this year.

In recent meetings with parents, Ocado has offered to run a fully electric delivery fleet from the industrial estate – an offer that depends on council and UK Power Network support – and build a “green wall” on its boundary with the school.

Local parent and campaigner James Hepburn told MT Ocado’s offer was unrealistic: “There is a total lack of infrastructure at the site to support electric vehicles. This could take years to install. Their offer of a green wall means they totally understand the hub poses health risks to the children. What we want is a commitment from Ocado to never operate diesel vans from this site.”

Another campaigner added: “We are horrified by Ocado’s attempts to hide this huge development by not putting in a full planning application, hiding behind weaker planning rules for industrial estates and failing to provide clear environmental and social impact assessments. The damage to the local environment and retailers in North London could be devastating.”

An Ocado spokeswoman said: “We are taking the concerns of Yerbury Primary School and other local stakeholders extremely seriously and have made a number of commitments to Islington Council to minimise emissions at this site.

“We continue to engage with the school, the local Council, and others as we develop our plans, which include significantly increasing the power supply to the site to allow us to use an all-electric fleet of delivery vans.”