Cut-price supermarket chain Lidl has agreed a £10m deal with Kingston Council to move its UK headquarters to Tolworth and its chief executive has promised "new jobs for local people".

The agreement will see the firm construct a new 220,000 sq ft office building in Jubilee Way, where the current motorbike track lies.

Subject to planning permission, Lidl will pay £2.1m per acre for a thousand-year lease on the 4.8-acre site.

Kingston Council said 500 jobs would be brought to the borough.

Council leader Kevin Davis said: "This is excellent news for our borough.

"We are delighted to have agreed a deal with Lidl for a plot of council-owned land in a prime location that is currently being underutilised.

"Having them headquartered in our borough will provide a huge boost to the local economy and employment market.

"It also sends out a clear message that the borough of Kingston is a good place to do business."

The Jubilee Way scrambling track's operators pay Kingston Council £800 per year for use of the site.

The authority said it would "provide assistance to the motorcycle club in finding suitable alternative accommodation within the borough, if possible".

Anne Allan, who runs motorcycle training on the track, said she found out about the plans this morning.

She said: "We were only told last week that they weren't going to renew our lease.

"Then they rang up this morning and said that they had sold the site to Lidl.

"We've been here for 14 years - there's going to be an uproar. It's knocked us for six."

Ingo Fischer, Lidl's property director, said: "The extra office space will ensure room for further development within our head office departments and will provide top-of-the-range amenities along with excellent training and conference facilities."

The chain's UK chief executive, Ronny Gottschlich, said: "We are firmly committed to helping boost the British economy by sourcing from the UK and continuing to create new jobs for local people."

The firm did not confirm this morning how many jobs would be created, but said the building's 750-person capacity will allow "continued growth in the future".

Part of the Jubilee Way site had been earmarked for the relocation of Arrow Plastics, one of the borough's biggest employers. That deal will no longer go through.

Councillors agreed in March to open up the land because the firm had no room to expand in its current Kingston location.

In return, the council and the Education Funding Authority were to have first refusal on Arrow's Hampden Road plot as the possible site for a new school.

A council spokesman said this morning: "No legally binding contract was entered into between Arrow Plastics and the council.

"Arrow Plastics' relocation plans remained at an early stage and no planning application had been submitted.

"The council has held fruitful discussions with Arrow Plastics and is actively helping them to identify alternative suitable locations in the borough to support this valued local business with its growth plans.

"The council is legally obliged to obtain the best possible price for any land it owns.

"The price that had been negotiated with Arrow Plastics was substantially below what has now been agreed with Lidl, and Lidl wanted the whole five-acre site, rather just a small portion of it."