The nightclub Home in London's Leicester Square, which opened in a blaze of publicity two years ago, has had its public entertainment licence (PEL) revoked after open drug-dealing was found on the premises by police officers.
Westminster City Council held an emergency session of its licensing sub-committee to revoke the music and dancing licence in the interests of public safety with immediate effect.
It was the first time the council had used its powers to revoke a licence under the Public Entertainment (Drug Misuse) Act, and comes just weeks after the council pledged to rid the city's West End of yobbish behaviour and "Ibiza culture".
After a series of undercover operations, police arrested a dealer for selling ecstasy and, acting on the advice of Scotland Yard's clubs and vice unit, the council held an eight-hour meeting to revoke the licence.
Carl Powell, Westminster's director of planning and transportation, said: "This decision should act as a warning to any other premises where there is a serious drug problem."
Revoking the club's PEL means it can still open but will have to close at 11pm. Managers, who claim the club has been made an example of, have been given 21 days to make representations to the council.