Home Secretary Jack Straw has confirmed it is "very unlikely" that magistrates will retain licensing control.
In the biggest indication yet that control will almost certainly switch to local authorities when licensing reform proposals are passed, Mr Straw told leaders of the Independent Family Brewers of Britain (IFBB) that the decision to move from magistrates had been taken after consultation with his government colleagues.
Despite widespread trade opposition, he said this decision was "very unlikely" to change.
The statement will come as a serious blow to most sections of the trade who have been vigorously campaigning to persuade the Government not to move control.
In The Publican's research, nine out of 10 pub operators and 85 per cent of licensees wanted magistrates to handle licensing - albeit with significant improvements to the current system.
Most cited political influences, increased bureaucracy and higher costs as the main worries.
However, the Government has consistently ignored the trade's arguments and ploughed ahead with its own agenda.
Nick Bish, chief executive of the Association of Licensed Multiple Retailers (ALMR), said he was not surprised by Mr Straw's comments.
"Of course, it will hugely disappoint many people who are passionate advocates for magistrates," he said.
"The ALMR has always said that local authorities, as presently operating, do not have the capacity to take on the task, the competence to deliver it fairly and in no way do they enjoy the confidence of their customers in the licensed trade.
"Nevertheless, the association is writing the key features of binding and consistent performance standards for whichever agency is to run licensing."
Mr Straw's comments came during a top level meeting between the IFBB, led by chairman Anthony Fuller, and Home Office officials.
Mr Fuller told the Home Secretary that family brewers were worried that local authorities would run licensing "less speedily, less efficiently, less consistently, less impartially and at a higher cost" than the present system under magistrates.
And he said the IFBB believed that putting pubs under licensing authority control would be a high price to pay for the limited benefits of licensing reform.
"We gave him a number of instances of the problems all of the brewers have had in the past with local authorities as regards to planning," Mr Fuller said.
"Hopefully, by making these comments we have been able to give him the reasons for our concerns about licensing reform.
"We weren't expecting anything more. It was good from our point of view to be able to see him face to face so he could hear our concerns and it was encouraging to hear him saying he understood them. Now we just have to wait and see."
Magistrates vow to fight for licensing control (18 April, 2001)
Jack Straw to meet brewers' group (11 April, 2001)
Licensing control fight faces set-back (10 April, 2001)