Councils threaten licensing hours fight

Plans to revolutionise Britain's drinking laws could be thrown into chaos by a legal challenge from London councils worried about a rise in binge drinking and violence.

Labour-run Camden and Tory-run Westminster council are threatening a High Court judicial review unless the Government offers to increase funding to cope with the change to 24-hour licensing.

With the row over the new law reaching fever pitch, Home Secretary Charles Clarke and Culture Secretary Tessa Jowell are to meet this week to discuss whether the drinks industry should be forced to pay more to police the changes.

Councils across the country are warning the council tax may have to go up to meet the new costs of town halls taking over control of the law from magistrates from next month. Ms Jowell is set to announce the fees that councils can take from pubs and clubs for licences this week amid fears that the drinks industry is getting relaxed hours on the cheap.

In a bid to prevent a repeat of the row over her casino plans, Ms Jowell is considering tough restrictions on happy hours as well as curbs on the sale of alcohol in supermarkets.

Ministers faced fresh criticism over the plans today after it emerged that former home secretary David Blunkett had warned the liberalisation of the law could lead to problems. A leaked memo showed the Home Office had warned the shake-up was a "leap in the dark" and risked " worsening the situation" of binge drinking.

Tony Blair and Ms Jowell dismissed the warnings and insisted that staggered closing times would reduce violence. Westminster council fears it will have to find

an extra ?4 million a year to meet the costs of the new system. Councils will be expected to conduct regular checks on licensed premises and many have told ministers that they simply cannot afford the staff bills.

Camden's leader Dame Jane Roberts revealed she had written to Ms Jowell demanding the Government "indemnify us in respect of the deficit" in her budget caused by the new law.

Dame Jane said she had warned of the consequences of relaxing the law almost five years ago when she and local police commanders predicted problems. It also emerged this weekend that a

Downing Street paper was re-drafted to remove evidence of a link between drink and 19,000 sex assaults every year.

References to the "adverse" impact of the policy on those living near bars and pubs was also cut from the paper. In another revelation, Andrew Cunningham, the official in charge of licensing policy at the Department for Culture, had been the subject of an official complaint for attacking-"nanny staters" opposed to reform of drinking laws.

Home Office and Department for Culture officials will bid to thrash out the funding for the extra policing costs. Mr Clarke has revealed police chiefs want a statutory levy imposed on the drinks industry.

But licensing minister Richard Caborn, whose department favours a voluntary levy on individual bars and clubs, claimed he knew nothing of such plans.