THE company behind the latest controversial nightspot proposals for a disused North-East cinema has dropped its public entertainment licence bid.

Yesterday, Durham City Council's licensing panel was to have considered Luminar Leisure's application for the old Palladium building.

But the firm has withdrawn the application, for the time being at least.

Council solicitor Lesley Blackie told councillors that the firm was appealing against the council's failure to decide its planning application within the statutory two months.

"They have withdrawn their licence application for now and it might come back at a later stage if they get planning permission,'' she said.

While a date for the appeal is sorted out, the firm has resubmitted the planning application in the hope the council's development control committee will have a change of heart.

Councillors have said they are "minded'' to refuse permission because of its impact on residents in nearby Claypath.

They felt that the proposed Chicago Rock Cafe would cause noise and disturbance to neighbours, including pensioners living in nearby flats.

Objectors include residents, the City of Durham Trust and the police, who are concerned the development will lead to more disorder on the city's drinking circuit.

They also opposed the public entertainment licence.

Chief Inspector Jamie McAloon said in the police's letter of objection: "The police have experience and evidence to show that purely commercial interests drive licensed premises and that financial gain exceeds all thought of quality.

"There are examples already in the city where cheap drinks promotions are in existence.

"There is evidence of an unhealthy competition among licensees for a limited custom.

"An additional 'large scale' - with a capacity of up to 500 people - late-night drinking outlet would exaggerate this problem,'' he added.