Traders in Kemp Town, Brighton, have accused the city council of going behind their backs to set up a new farmers' market.
The shopkeepers have been working on plans to introduce their own market to boost regeneration in the area.
But the council has given the go-ahead to a market in The Lanes which the traders say will wreck their plans.
Tom Mannouch, secretary of the St James's Street Traders' Association, said the council seemed bent on sacrificing district shopping areas to the city centre.
He said: "Areas such as ours, Lewes Road and London Road, are dying. It seems the city centre management is only interested in the centre. We feel we have been stabbed in the back."
Kemp Town already suffered from high levels of drunkenness, drugs, theft and violent crime.
Mr Mannouch said: "The police support what we are trying to do, as do the other emergency services, our ward councillors and our MP Des Turner.
"The council know we have been working with Town and Country Markets to organise this market but they seem to have moved the goalposts."
The traders want to introduce a Saturday market of 40 to 60 units selling quality goods in either George Street or Ardingly Court, off High Street. They hope to have it up and running this summer.
The rival market has been given the go-ahead to operate in Bartholomew Square on alternate Sundays.
Mr Mannouch said: "Of course we support the farmers. This is about gaining business rather than destroying it. But the council isn't ready to support us.
"We pay the same rates as businesses in the centre and we should be entitled to the same consideration."
Mr Mannouch, licensee of Thresher off-licence, said the St James's Street area had recently undergone a face-lift but the local economy was still fragile.
He said: "A blow like this could kill us off. Some of the businesses are living day to day."
Tony Mernagh, city centre manager, said the farmers' market was planned 18 months ago, almost certainly pre-dating the Kemp Town one.
He accused the traders of over-reacting. He said: "It's only a pilot scheme and will only be held once every two weeks. I think Brighton is probably big enough to have two markets."
He denied the City Centre Business Forum concentrated on the heart of Brighton at the expense of the districts.
It had regular meetings with the Kemp Town traders, who were welcome to draw on its expertise at any time.
He said: "These are two very different parts of town. Local areas serve the needs of their local community. Let's wait and see what happens."
A council spokesman said giving the go-ahead to the farmers' market did not rule out similar markets in other areas.
He said: "Plans for a market in Kemp Town have not been rejected and the executive member for the environment, Councillor Chris Morley, would be delighted to meet traders."
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