The operator of Fife Central Retail Park has won a Scottish Office appeal linked to a development at the site.
Hammerson will be allowed to sub-divide the former Homebase complex into five smaller units, after successfully challenging a Fife Council ruling.
The original planning application had been refused in June by members of the authority’s central area planning committee.
Councillors believed the move could affect Kirkcaldy town centre, as well as those in Leven and Glenrothes.
However, Hammerson contested the verdict, with a Scottish Government reporter finding favour with the company and granting permission for the sub-division work to begin.
In throwing out Hammerson’s application, councillors had said they were trying to stop the decline of Kirkcaldy’s town centre.
With the retail park already one of Fife’s most popular shopping destinations, committee members said the high street would be vulnerable to any expansion of its rival, especially if consent was given for smaller retail spaces.
As well as struggling to compete with the brands already at the retail park, the town’s traditional shopping precinct had been affected by the closure of the Tesco supermarket and other high-profile shops, as well as the subsequent liquidation of BHS.