Government officials announced the decision on the £400m development, which also includes a Tesco superstore, yesterday evening. The result means the planning process could be delayed by as much as a year - from the public inquiry, along with the possibility of costs rising.

The 50,000-seat stadium proposals are part of the wider regeneration of Kirkby town centre, which is in Liverpool's neighbouring borough of Knowsley.

In a statement Everton Football Club said it was disappointed by the decision but that it 'does not spell the end':

"We are disappointed by the decision. Having spent more than two years working diligently on a project which would not only provide Everton Football Club with a new home but also regenerate Kirkby, we had hoped to avoid a Government call-in.

"Indeed, it was only in June that Knowsley Borough Council's Planning Committee voted by a majority of 20-1 to grant planning permission.

"We shall now engage in detailed discussions with our development partners, KBC and Tesco, to assess what options are open to us.

"It is important to stress that this decision does not spell the end of the Destination Kirkby project - but it will, self-evidently, precipitate a period of reflection, assessment and re-evaluation."