Tesco, Asda, Sainsbury's and Morrisons dominate the sector

The watchdog is looking into claims that Tesco and Asda have been pressurising suppliers to cut prices.

It is part of larger inquiry launched last year into the sales methods of Tesco, Asda, Sainsbury's and Morrisons.

The supermarkets deny any wrong-doing and say they follow a strict code of conduct when dealing with suppliers.

'Thorough investigation'

A spokesman for the Competition Commission confirmed legal notices, called Section 109s, had been served on Tesco and Asda.

The notices would allow the watchdog "to investigate more thoroughly", he said.

He added: "We are being thorough and using our powers where we can."

We are happy to help and we have got absolutely nothing to hide

Asda spokeswoman

But the supermarkets said they had "nothing to hide".

A spokeswoman for Asda, which is based in Leeds, said: "We adhere to the code of conduct between suppliers and supermarkets.

"During the period which the commission want to see our correspondence there were about 11 million e-mails to suppliers.

"But we are happy to help and we have got absolutely nothing to hide."

Stores 'squeezed out'

A spokeswoman for Tesco, based in Hertfordshire, also confirmed the commission has issued the supermarket with Section 109 notices.

She said: "We have nothing to hide and we are doing what we can to assist the commission with this enormous data request.

"We expect the commission to conclude that at Tesco, relationships with suppliers are professional and act to the ultimate benefit of the customer."

The Office of Fair Trading referred the £120bn supermarket sector to the Competition Commission in May last year, amid claims that top supermarkets had become too powerful and smaller stores were being squeezed out.

The watchdog has been examining the supply chain, planning and land banks of the four big UK supermarkets as part of its two-year inquiry into their market dominance.