Bar and club trade body Noctis has warned scrapping the Security Industry Authority (SIA), which licences door staff, could herald a return to the "dark old days" of unregulated bouncers.
The Home Office confirmed that the future of the SIA is under review but that no final decision had yet been made.
The Home Office is said to believe that scrapping the SIA may help to reduce regulation, save security firms money and that the industry may now be mature enough to police itself.
Although the SIA is largely self-financing, it received £17.4m in extra public funding in 2008 due to administration problems and "poor forecasting" of licensing demands.
Paul Smith, executive director at Noctis, said he was not surprised by the move but urged the Government to keep the SIA in some form. "The SIA has considerable costs attached to it and could be a much leaner organisation," he said.
"The costs of the SIA have a had a bearing on how much licences are.
"For example, why does it need to be based in central London? I have never understood that. We have done very well as a trade body based in Greater Manchester.
"It is not a lean organisation. I think there could be cost cutting but it is important we keep the SIA, or a a similar body, to licence door staff."
Shady reputation
Smith said without a regulatory body, he feared a return to the "dark days" of unregulated bouncers with shady reputations rather than professional door staff who have completed training courses.
"The Government should not take a short term view on this. Costs could be cut but we could still keep the SIA. To take away all the good work done would be a real shame.
"It would be detrimental to the industry and its reputation."
Michael Kheng of the Kurnia Group added: "The industry needs to be regulated to a national not regional standard.
"Although in the early days I was sceptical about the role of the SIA I am now a supporter of the SIA. The industry has changed for the better and we need to ensure that it remains that way."
Efficiency
A Home Office spokesman said: "The Government is committed to making substantial reforms of its public bodies to increase accountability and reduce their number and cost.
"All departments are working with the Cabinet Office and treasury to assess our public bodies and ensure they perform an essential role which has to be carried out by Government and cannot be provided more efficiently elsewhere.
"No final decision has been made and we expect to make an announcement in due course."