London's Camden Council is calling for the government to pay back the mounting costs of taking over responsibility for licensing.
It claims that the act which has been in operations for just under two years has cost taxpayers almost £3 million. It is pushing for licensing fees to be increased to cope with the burden and estimates it will face a deficit of £593,000 for 2007/2008.
The council has now called on the new secretary of state for culture, media and sport, James Purnell, to put this at the top of his agenda.
Leader of Camden Council, Cllr Keith Moffitt said: "It is not good enough that Camden taxpayers have to foot the bill for introducing the new Licensing Act.
"The government promised that licensing fees would be set at a level to cover administration, inspection and enforcement costs faced by councils as a result of the new Act. It has clearly broken this promise and our residents are suffering as a result.
"Camden is a high performing council, however the Elton Review cites 'inefficiency' by local authorities as the reason for the massive losses. The Council regards this as a convenient excuse."
Cllr Mike Greene, Camden Council executive member for environment, said: "Camden is unique due to the number of licensed premises in close proximity to residential properties, meaning almost every application receives representations resulting in higher administration costs.
"The heart of our concerns is why local taxpayers should be forced to subsidise the operations of the alcohol industry. It is not acceptable."