Thousands of pubs, clubs and late night takeaways across the Midlands could be forced to close by Christmas because they have failed to apply for new licences.
Only a tiny minority have so far submitted the necessary paperwork, local councils have revealed.
And last night Ministers admitted businesses including Birmingham's Balti houses could be forced to stop serving over the festive season. In Birmingham, 2,500 premises need licences to continue trading, but just 100 have applied.
The problem is just as serious in other parts of the region. For example, only 70 of the 3,000 affected premises in Herefordshire have applied for a licence so far.
The deadline for applications is August 6 but authorities fear they will be faced with a huge backlog, as businesses leave it to the last minute to apply.
There is also concern that many independent traders simply are not aware they need new licences.
The requirement is a result of the Government's Licensing Act, which comes into force in November.
Speaking to The Birmingham Post yesterday, Culture Minister James Purnell, the Minister responsible for licensing, said: "As long as people apply by August 6, it seems to us that, by and large, local authorities will be able to process them.
"The problem is if people don't apply, because they would face the problem of not being able to trade over Christmas." Indian restaurants are a particular concern, and the Department of Culture, Media and Sport has asked the manufacturers of Cobra beer to include a message in their next monthly magazine, which goes to 8,000 traders.
Attention has focused on new laws included in the Act which allow pubs to introduce 24-hour drinking.
But there is concern that landlords may not realise they need a new licence even if they do not want to change their opening hours.
The Act also introduces a new requirement that anyone providing refreshments between 11pm and 5am needs a licence.
This includes restaurants, late-night kebab shops and burger vans, whether of not they sell alcohol.
The average small pub of restaurant will be charged a £190 fee. Large premises will pay up to £1,000.
Existing businesses which already have a licence can apply for a fast- tracked "grandfather" licence before August 6.
But after that date they will have to go through the same lengthy process as brand new applicants, including a twomonth training course for licensees. Solihull Council has received 12 applications from 600 affected premises, while Stratford District Council has received 32 applications from 650 premises.
Malvern Hills District Council has received only 20 applications from 600 premises and Warwick District Council has received 25 applications from 700 premises.