The charter under common law dates back to the reign of Henry VIII
A charter dating back to the reign of Henry VIII has been invoked to stop a street market in Carmarthen trading.
Stallholders at the traditional outdoor market complained they were losing out to a new produce fair on Saturdays at the Greyfriars shopping centre in town.
It was stopped after Carmarthenshire council used the charter that states no other market can open within almost seven miles of the traditional market.
Organisers of the new market called the rule "silly" and plan to challenge it.
Ystalyfera-based Good Food Wales was invited to run an open-air market each Saturday outside shops on the privately-owned Greyfriars complex.
Around eight to ten stalls sold local produce ranging from sausages, pies and pasties to cheeses and shellfish.
But traders at the long-running outdoor market near the town centre market hall complained they were losing business.
Carmarthenshire council said it discovered a 500-year-old charter that it invoked to protect the established traders.
Head of corporate property Jonathan Fearn said: "We have acted following complaints and concerns from our Carmarthen market traders, seeking to defend them from rival markets operating in competition.
"Statutory markets carry the benefit of a common law right to protection from rival markets within a radius of six and two-thirds miles, to ensure they are as successful as possible."
He said Carmarthen's was a charter market dating back to the reign of King Henry VIII.
"It is this right which dates back hundreds of years that we are using to protect it.
"We advised Greyfriars of the law and they agreed that their market would stop operating.
"However, we do want the town centre to be as vibrant and varied as possible, and we have offered the Greyfriars market the opportunity to join our monthly farmers' market as a way forward."
Paul Brendon of Good Food Wales said they had declined that offer and would challenge the order.
He said despite running for just six weeks their market was attracting more shoppers to Carmarthen and supermarkets were a much bigger threat to stall owners.
"The whole thing is just a nonsense," he said.
"It's very sad that Carmarthen has taken this approach.
"We all produce and sell local produce from Carmarthenshire, Pembrokeshire and Neath Port Talbot and are being denied the opportunity to do that."
He said a similar situation existed in Bridgend.
"These old charters get dusted down and wheeled out every now and again.
"We will certainly be challenging it - we are at the information-gathering stage at the moment."