Tesco sues for refund on bicycles order

Britain's biggest retailer is taking legal action after mistakenly paying almost £1m for six bicycles which should have cost less than £1,000, sources said today.

Tesco is seeking restitution of the overpaid monies following the error by its finance team.

The supermarket chain should have paid Universal Cycles, a subsidiary of Sports Direct which is controlled by Newcastle United owner Mike Ashley, £984 for six Muddy Fox Suspension Bikes but paid £984,000 instead.

Universal, an Essex-based company majority-owned by Sports Direct, has paid back £863,000 but Tesco claims it is holding on to more than £121,000 in outstanding funds, sources said.

It has launched legal action at the High Court to recover the remaining money, legal costs and a further £1,783 - the sum the retailer claims it is owed in interest at 8 per cent a year.

The error was made on 13 August and Universal was asked to repay it 15 days later.

Universal then repaid some of the funds on 29 September, but £121,412 is outstanding, sources said.

It is understood a meeting will be held between the two parties in a bid to resolve the dispute out of court.

A Tesco spokesman declined to comment on the ongoing case.