An increase in the maximum size of supermarkets in Ireland's largest cities has been proposed by the Government.

The development follows a commitment under the EU/IMF programme that the State would consider eliminating the cap on retailers' size.

In a consultation document published today by Minister for the Environment Phil Hogan, the cap on supermarkets in the Greater Dublin area will increase from 3,500 to 4,000 square metres.

In Cork, Limerick, Galway and Waterford it will increase to 3,500 square metres and in the rest of the country it will be 3,000 square metres.

The restriction on retail warehouses will remain at 6,000 square metres.

The Government commissioned think-tank Forfás to look at the issue. It concluded that scrapping the retail cap would produce mixed results.

Small business group ISME claimed that repealing the retail planning guidelines would create a "retail desert" landscape across the country.