The Birmingham Post has appealed against a decision by Solihull Council to refuse disclosing documents relating to the £100 million redevelopment of Shirley town centre.
The council had blocked a request by The Post to disclose the agreement between the local authority and developers relating to the New Heart for Shirley proposals.
Developers Shirley Advance will this week submit a planning application which contains proposals designed to revitalise Shirley with new shops, houses and environ-mental improvements.
Legal officers at the council claim documents relating to its settlement with the developers are commercially sensitive and disclosure could provoke a legal challenge from Shirley Advance.
The request was made under the Freedom of Information Act and The Post has written to Solihull Metropolitan Borough Council raising concerns about the lack of public accountability with the agreement.
The settlement has caused controversy in the community, with claims that it includes a caveat allowing a new super-market to be built in Shirley.
Local campaigner Rod Pitham, a retired solicitor and a former senior officer at Solihull Council, said: "Developers Shirley Advance and the council claim they involved the public in extensive consultation, but this is simply not true.
"They never disclosed that the important features of the scheme had been fixed beforehand by this secret agreement. The public's hands were tied and representations or objections nullified."
Local residents have heavily criticised plans for a super-market in Shirley, as they believe the area already has several large stores.
However, the council has always claimed that a super-store is needed to lever in more investment into the regeneration proposals. Solihull Council's information governance assistant Joanne Summerill said Shirley Advance was approached following The Post's request.
However, it felt disclosure would constitute "a breach of confidence" which would "prejudice its commercial interests", she added.
Ms Summerill said: "It would not be in the public interest to prejudice either parties' commercial interests and leave the council vulnerable to legal action being taken against it."
The council's corporate information governance manager Andrew Shipway said the appeal investigation should be concluded by April 7.
Officials from Shirley Advance - a partnership between developers Coltham Developments and Helical Bar - claim the proposals will help revitalise the town centre by bringing more trade to the area.
The planning application meets a list of 'key elements' set out by the council which requires the scheme to include a food store of at least 40,000 sq ft, other retail units, a town square, housing, at least 600 car parking spaces, toilets and improvements to Shirley Park.
The developers were given the green light to submit the application last July after the council cabinet agreed they had met the criteria.