Image: Tesco plc Image: Tesco plc

Tesco has been found in serious breach of the supermarket industry's code of conduct by deliberately delaying payments to suppliers, the ombudsman has found.

The Grocery Code Adjudicator Christine Tacon said Tesco "knowingly delayed paying money to suppliers in order to improve its own financial position".

In some cases, even though Tesco admitted it owed suppliers money, it still took up to 12 months to catch up with payments. In a few instances, it even took two years.

The findings are a result of an investigation into a £326 million black hole found in the supermarket giant's finances.

Ms Tacon said: "I received internal Tesco emails which encouraged Tesco staff to seek agreement from suppliers to the deferral of payments due to them in order to temporarily help Tesco margin.

"I also saw internal Tesco emails suggesting that payments should not be made to suppliers before a certain date in order to avoid underperformance against a forecasted margin."

Tesco chief executive Dave Lewis, who took over after the revelations concerning overstated profits, said: "Over the last year we have worked hard to make Tesco a very different company from the one described in the GCA report.

"The absolute focus on operating margin had damaging consequences for the business and our relationship with suppliers. This has now been fundamentally changed."