An off licence owner claims he might go out of business because the council has told him he is breaching the terms of his lease by selling groceries.

Meanwhile a husband and wife team who run a grocery shop next door say they are considering taking on second jobs to "make ends meet" because they are losing customers.

Gurmej Riarh, who owns The Wine Palace, in Westlands Drive, Northway, Oxford, started selling groceries six years ago when a neighbouring food shop closed.

But when Rosie's opened next door in 2001, Oxford City council told Mr Riarh his shop was only allowed to trade as an off licence under the terms of its lease.

Mr Riarh continued selling food to meet customer demand but the council has again ordered him to only sell drinks or face court action. He has been given a deadline of Friday, September 17 to stop.

Residents who are upset about the decision have started a petition, which has about 500 signatures.

Mr Riarh said he was happy to stop selling groceries provided he could still sell soft drinks and snacks.

He said: "If I don't do what the council say they will take me to court and I may go out of business. It is a serious situation for me."

John Day, who lives on the Northway estate and signed the petition, said the shop was a lifeline for many people. He added: "It is such a shame as Mr Riarh is such a friendly person."

Another off licence customer, who asked not to be named, said it was important to give Mr Riarh moral support for his campaign.

But Vahid Jahangard -- who owns Rosie's, also in Westlands Drive, which is run by his sister Sholeh and her husband Mohsen Khalili-Nejad -- said their food store was struggling to survive.

He said: "It is not even fair competition because Mr Riarh is open all hours."

His sister Mrs Jahangard, who has kept the family name, said her neighbour's behaviour was affecting her profits.

She said: "Once he closed for an hour and in that time we sold nearly £100 worth of items.

"We try to keep our stocks low as we can't guarantee we can sell it."

City councillor Maureen Christian, who represents Headington Hill and Northway, said Mr Riarh opened his shop on the understanding that it was just an off licence.

She said: "The grocery shop is having a real struggle. He never closes and when he does, their takings go up dramatically. He is not being fair."

City council spokesman David Penney said each shop should abide by the terms of its lease "to maintain a range of services in the interests of the community".

He said: "When people sign a lease they go into it knowing what the restrictions are. If the lease is being breached the council can take court action."

A similar petition to allow groceries to be sold at The Wine Palace was organised in 2001 by Reah Debanks and her husband Graham, formerly of Plowman Tower, Westlands Drive.