POLICE fear plans for a controversial nightspot could spark a city centre drinks price war.

Durham City Council looks likely to refuse Luminar Leisure planning permission to convert the disused Palladium cinema, in Claypath, into a late-night Chicago Rock Caf bar.

Councillors feel that it will cause noise and disturbance to residents, including pensioners living in nearby retirement flats.

But the firm is appealing against the council's failure to decide the application within two months, and has also submitted a fresh planning application for the scheme.

On Wednesday, the council's licensing panel will consider the company's application for a public entertainment licence to open daily from 11am to 1am.

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

Chief Inspector Jamie McAloon said in his 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 late-night drinking outlet would exaggerate this problem."

Chief Insp McAloon said the development, with an estimated capacity of 500 people, would be one of the largest bars in the city, and would undoubtedly become a focal point of the drinking circuit.

He said large numbers of young, "often boisterous" people could frighten some people away from the area.

Roger Cornwell, chairman of the City of Durham Trust, said: "The city council has been very good at listening and taking on board the views of the residents near the Palladium."

City council head of planning David Thornborrow said he was puzzled by the re-submitted planning application.

"They are going to appeal, but it could give the council a chance to reconsider its views. I don't know if that is the case here."

The firm's application for a drinks licence has been adjourned by city magistrates until later this year, when there is time to hear the weight of objections.