Four major trade groups are consulting lawyers about the legality of new Home Office plans.
These would give councils powers to impose draconian conditions on bad pubs without formal licence reviews.
Blanket use of CCTV, pointed at customers inside, is one of the more stringent conditions councils could apply.
Police in Essex and London boroughs Islington and Richmond are already asking for blanket CCTV at pubs in designated areas, despite objections from privacy watchdog the Information Commissioner's Office.
A late amendment to the Policing & Crime Bill would allow councils to single out problem pubs and issue new restrictive trading conditions on premises without giving licensees a formal chance to respond at hearings.
The British Beer & Pub Association (BBPA) has questioned the legality of the plans, which they claim could breach natural justice.
"We are questioning whether you can impose new conditions on a licence without a review or successful prosecution of a prem-ises, and whether this fits with natural justice," said BBPA chief executive Rob Hayward.
"We are consulting lawyers as to whether the Home Office proposals are within the law," he added.
The association has joined forces with the Wine & Spirit Association, British Retail Consortium and the Association of Convenience Stores to explore the legal ramifications of the plan.
Morning Advertiser legal editor Peter Coulson claims the Government has inserted the amendment to the Bill "quietly, with the minimum of publicity".
He suggested the changes have been introduced as an alternative to alcohol disorder zones, which the Home Office has now discovered are a "no-no".
Under the amendment, a council would be given the green light to identify two or more pubs it perceived to be a problem and impose conditions without the need for the formal review proceedings that are currently required.
Coulson said this and other changes to the Bill, which seeks to lay down a new code of practice on such things as alcohol retailing, bore all the hallmarks of putting right a "botched job".
Nick Bish, chief executive of the Association of Licensed Multiple Retailers, said the proposal should be put away in the same locked Home Office cupboard that currently stores the alcohol dis-order zone plans.
"There are already relevant and sufficient powers on the statute book and they do not need any more to address this sort of problem.
"Unfortunately, however, there are some local authorities who will grab any new tool offered to them by this kind of legislation."