Sadiq Khan has criticised the “breathtaking arrogance” of Westminster council, which has kept restrictions on vertical drinking in Soho and an effective ban on new bars and pubs in the area.

The mayor of London has accused the Conservative-led council of “ignoring” the responses to a consultation into its new licensing policy. The vast majority of respondents, 81%, disagreed with the council’s “cumulative impact zone” which decrees that applications for bars and pubs in the West End of London, one of Europe’s most famous nightlife districts, will be refused unless in exceptional circumstances. Eighty-four per cent said the licensing policy would be bad for business.

Respondents also criticised the council’s position on “vertical drinking”, which is standing up to have a beverage, a common practice in British pubs. The council proposed, to widespread outcry, that new licences for pubs and bars should be granted to those venues which have table service instead of ordering at the bar, and those in which people are seated rather than standing.

The mayor had responded to a consultation held this summer by the council and ordered them to scrap the cumulative impact zone and allow pubs and bars to have space for vertical drinking. Andy Burnham, the prime minister, also waded into the row, saying vertical drinking is “British life”.

Despite this, the council is continuing with both the vertical drinking policy and the cumulative impact zone, and said that those who wrote to complain did so because they did not understand the terminology in its licensing document.

Khan told the Guardian: “The arrogance of Westminster council is breathtaking. By ignoring all those who oppose their plans and viewing hospitality in the heart of our capital city as a problem, they are letting down businesses, residents and our economy. They would rather see nightlife die than thrive.”

Tim Barnes, Westminster city council’s deputy leader, said the issue was a policing one and called for more resources for the area. He added: “Beyond disagreements over policy jargon there are serious issues acting as a drag on our hospitality industry.

“A lack of investment in policing has left the Met objecting to many licensing applications over public safety concerns.”

But the final licensing policy keeps restrictions on vertical drinking. It reads: “When considering new licence applications, discourage excessive drunkenness and encourage the provision of more seating in premises that serve alcohol for people to sit and enjoy a drink and order food by table service in place of open bar space that caters for high volume vertical drinking.”

In the revised policy, the council says it did approve a new pub in the cumulative impact zone recently – The Lady in Covent Garden. However, most of the space in this pub is for a sit-down restaurant. The document states that the bar on the bottom floor of the pub would not usually be allowed, but in this case it is because it will “only operate in association with the restaurant use”.

The government is due to grant new powers to Khan, allowing him to “call in” local council decisions he opposes.

He said: “London’s famous hospitality and nightlife sectors are vital for our economy, and one of the reasons our capital is so special.

“Running our world-famous nightlife district with a nimby village-hall mindset is simply not sustainable. This is why the government was right to give me new powers to help ensure our fantastic hospitality and nightlife can flourish, helping create more jobs and ensure we stay a vibrant global city.”

Data shows that only 3.5% of applications that went to a licensing subcommittee in Westminster were approved exactly as applied for between 2023 and 2026. Pub and wine bar applications were down 80% in 2022-24.

The Soho Society, a group established in 1972 aimed at “preserving the character of Soho”, voted in its AGM earlier this summer for a new licensing mandate, meaning it will challenge all new applications for bars and restaurants in the area, including reviews of existing licences. It will also object to any venue that wishes to open beyond “core hours”, which Westminster council decrees end between 10.30pm and midnight, depending on the business and day of the week.