Trade leaders are considering a judicial review against Oldham Council for its controversial bid to review licences at all 22 town centre bars.
In an unprecedented move, trading standards ordered blanket reviews to force draconian restrictions on the venues - including operating "post office-style" bar queues.
The news follows an escalation in drinks promotions, with several bars running all-inclusive drinks deals. Last week the licence of Brownz in Yorkshire Street was suspended for 28 days after stabbings on the street.
Cllr Mark Alcock said its move is to "help us ensure town-centre bars can operate on a level playing field and do not feel forced to adopt more and more extreme pricing."
Trade leaders say reviewing all licences in one go contravenes the Licensing Act because it amounts to blanket action against venues.
Major managed operators have called for united action against Oldham and trade associations have discussed the possibility of legal action.
Paul Smith, executive director of Noctis, which represents late-night operators, said: "I absolutely would look at a judicial review [against the council].
"No one would like to take the legal route first. That would have to be a decision made once partnership and talking didn't work. We are looking at a range of options."
Tough restrictions proposed for bars that run promotions include making venues pay for police, banning customers ordering more than two drinks per visit to the bar and banning drinking in queues.