Trade chief Paul Smith says there's a "strong possibility" the mandatory alcohol retailing code will be shelved — but it's "not a done deal".
He was reacting to reports in the Times that Lord Mandelson, the business secretary, has ordered a raft of regulations to be delayed due to the recession.
In a letter to members of a Cabinet sub-committee, Mandelson singled out the mandatory code on alcohol as a candidate for delay.
The code, which would have forced pubs to follow conditions including curbs on drinks promotions and smaller drinks servings, could cost the trade £58m to implement with on-going annual costs of £38m.
Mandelson wrote: "I support the approach that where measures appear without a planned implementation date — and on the assumption they are not planned for the near future — we commit to not imposing these measures until after April 2011."
Smith, executive director of NOCTIS, pointed to huge opposition to the code among police and councils, as well as other Government departments outside the Home Office and Department of Health.
As to whether the code will be shelved, he said: "I don't know if it's an entirely done deal.
"What's pretty clear is the anti-faction is growing by the day and that's a pretty clear indication it's not going through. But we thought that about alcohol disorder zones — they came in despite massive opposition.
"I would say there's a very strong possibility the mandatory code won't come in. A lot comes down to fact we and others have put a lot of effort making sure it doesn't come in.
"I would be over-joyed to see it [shelved] but I'm not sure we are there yet."
Meanwhile, Mark Hastings, British Beer and Pub Association director of communications, said: "We are very pleased the Government has listened and responded to our compelling arguments on this unnecessary and disproportionate legislation — and recognised the damage that it would do to Britain's pubs.
"This is in no small measure due to the active and intensive lobbying we have pursued — and particular thanks are due to the thousands of people who responded to the Government through our Axe the Beer Tax/Save the Pub website, which I am sure made a real difference to the campaign.
"While the code is now shelved, we have made clear to Government we would continue to support specific targeted action on irresponsible promotions. This could still be achieved, through a straightforward measure that doesn't drown Britain's pubs in costly red tape."
Good news
A Wine and Spirit Trade Association spokesman said: "Delay would be good news for the trade. Abandonment would be better.
"We've always been clear that now is not the time to be adding another raft of rules and regulations particularly when police and enforcement agencies have made clear during consultation that they believe they already have the powers they need to clampdown on irresponsible promotions and anti-social behaviour."
Association of Licensed Multiple Retailers chief executive, Nick Bish, said: "We welcome the news that the Government is prepared to listen to the arguments being put forward by the trade and that Lord Mandelson in particular has recognised the commercial imperative.
"This is clearly as much a political as a business decision — for the benefit of the Labour Party rather than the pub trade"
"Mandleson's announcement is nothing more than a recommendation for delay — not a scrapping of the Code itself. It will mean nothing unless it is translated into actual practical action.
"The Policing and Crime Bill is still going through Parliament and, if adopted as drafted, will still give Ministers the power to introduce a Code in the future.
"The Bill will be debated again by the House of Lords on 13th October and unless the clause setting out the Code is deleted from the Bill, today's announcement will be a pyrrhic victory. If the Code is not right for now, it is not right for later"