Pubs and clubs will lose their licences after breaking the drinking laws twice and people caught drinking in public areas where it is banned will face increased fines, the Government will announce today.

Ministers will hold out the prospect of blanket licence bans in the early hours where there has been persistent trouble from rowdy drinkers but they will not reverse the 24-hour licensing laws. Two reviews from the Home Office and the Department for Culture, Media and Sport of the 30 months of operation of the 24-hour law will give it qualified backing — “a mark of seven out of ten” according to one senior official.

But at the instigation of Gordon Brown and Andy Burnham, the new Culture Secretary, measures designed to tackle binge drinking and the irresponsible minority who have abused the laws will be outlined today and later in the year.

Council leaders claimed that the law was stretching the police and disrupting communities but ministers said that they were concerned about apparent increases in unruly behaviour between 3am and 6am. In trouble-spots all licence holders could face a ban at these times. Officials said that the Prime Minister did not regard the issue of the drinking laws to be closed.

The new measures include:

— A yellow and red card system for pubs and clubs. Those who break the terms of their licence will be given a warning and told how to put matters right. If they commit a second offence they will get a red card and have their licence revoked. Supermarkets in breach could be required to have just one till for alcohol sales;

— Off-licences that sell to under-age customers will lose their licences after the second offence;

— The maximum fine for people who are caught drinking in a public area where it is banned will rise from £500 to £2,500;

— Acceptable behaviour contracts, under which people agree with local authorities to stop offensive behaviour, will be extended to include behaviour related to alcohol abuse.

The measures come the day after Sir Simon Milton, the chairman of the Local Government Association, said the idea that late-night licences would end binge drinking had failed.

He said: “The real problem about alcohol violence going later into the night is not simply to do with the clock. Policing resources are being stretched further into the night.”

Mr Brown announced a review of the Licensing Act, which allowed pubs and clubs to apply for later — or even 24-hour licences — after becoming Prime Minister in June. It was one of several reviews of existing policies that included allowing a super-casino in Manchester, which has since been scrapped, and the decision to downgrade cannabis.

Mr Brown told the Labour conference in September that he would not hesitate to change policies if he thought it necessary. He said that violent, drunken behaviour was being fuelled by cheap alcohol drunk on the street, bought from shops and rogue off-licences.

Government figures published in November suggested that 500 pubs and clubs had been granted 24-hour licences since the law was introduced. But ministers said that most 24-hour licences went to hotels, which serve drinks only to their guests.

Ministers have said that the evidence suggests there had been no overall increase in violent, drink-related crime since the law came into force. However, some of it now happened later at night.

Damian Green, the Shadow Immigration Minister, said that there was evidence that the measure had resulted in more violence, more crime, more of a strain on the police and more problems in communities. He said a policy that dealt with the sale of alcohol to young people, the price of alcohol and the time licensees were allowed to sell it was needed.

The Conservative leader, David Cameron, said: “We don’t want to go back to the situation of every pub shutting at the same time and having huge problems in our market squares where everyone came out of the pubs and started fighting with each other.”

Chris Huhne, the Liberal Democrats’ Home Affairs spokesman, said: “The basic problem is not that we need new powers and penalties — it’s that we need to enforce the law that we’ve already got.”

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