The environmental pressure group has cast a cloud over the launch of PPS 6, 'Planning for Town Centres', claiming the policy forces local authorities to earmark sites for large retailers.
But Hugh Ellis, Friends of the Earth planning adviser, urged councils to safeguard the integrity of town centres by resisting the policy.
'It's down to local authorities to make a stand. If they don't, big supermarkets may force them to release land in town centres for development, even if this restricts consumer choice by damaging local shops,' he said.
'While we welcome any attempt to sustain and regenerate existing town centres, government planning policy should have gone much further to restrict the domination of our high streets by an aggressive group of large retailers,' Ellis added.
The government insisted its planning policy was integral to promoting sustainable communities.
Planning minister Keith Hill said: 'PPS 6 will drive the renaissance of towns and cities large and small, in rural and urban areas. We want to see a sustainable mix of development that enhances consumer choice and meets the needs of the entire community.'