A clause in the Licensing Bill could spell chaos for expanding pub companies and herald the end of new-build pub developments.
The bill, which is currently being debated in the House of Lords, will allow local residents to object to new premises even after they have been granted a provisional licence.
This will mean that pub operators could lose millions of pounds invested in premises if a local authority finally rejects the licence application.
Stephen Haupt, chief executive of Regent Inns (pictured), has blasted the government over the clause, claiming it will hit growth in the sector.
"At the moment, once you win the arguments and are granted a provisional licence, you can develop your pub. In the case of Regent Inns that can mean up to £3m. As long as you follow the plans and do what you said you would do, the provisional is automatically transferred to a full licence.
"This bill says that, after spending £3m, people have another opportunity to object. We cannot afford to risk plunging that sort of money into a project only to be refused a licence to trade. It is ridiculous.
"Who the hell is going to invest major capital and spend 18 months or longer fighting objections?".
Regent Inns is so concerned about the clause that it has employed its own lobbyist.
The Publican's legal expert David Clifton, of London firm Joelson Wilson & Co, said: "Once an operator has gone to the massive expense of developing the site in accordance with the council's specifications, it may face a challenge out of the blue from someone who never objected in the first place."
A spokesperson for the Department for Culture, Media and Sport said: "Any business considering a new development would, as a matter of sound business practice, investigate all the relevant factors before making a significant investment."
JD Wetherspoon has also spoken out against the clause. Eddie Gershon, spokesman for the company, said: "As the law stands people can object to the plans of any new pubs at both the planning and licensing stages.
"It seems as if the Licensing Bill makes more provisions against the possible building of new pubs and while we recognise that people have the right to object, this should be balanced against the rights of responsible pub operators who invest in an area and develop new sites."
Current system
- find site for development
- apply for licence and planning permission
- win provisional licence
- develop site
- provisional transferred to full licence as long as plans are adhered to.
Under new proposals stage five would not be automatic.