Alan Johnson has quietly dropped new powers for local councils to close down bars in areas blighted by binge-drinking two weeks after they were promised by Gordon Brown.

In his speech to the Labour Party conference Mr Brown said that the Government “will give local authorities the power to ban 24-hour drinking throughout a community”.

The Home Office confirmed yesterday, however, that it had given in to opposition from the drinks industry and ditched the so-called blanket banning orders.

Other proposed local council powers set to be dropped from the Policing and Crime Bill currently going through Parliament include the right to outlaw happy-hours, ban glass containers at peak hours and insist that only over-21s are served in particular premises.

A spokesman for Mr Johnson, the Home Secretary, denied that he had watered down Mr Brown’s much-vaunted crackdown on binge-drinking. He said that in place of the abandoned discretionary powers, councillors would be given the ability to initiate licensing reviews.

Nevertheless, the dilution of the mandatory code on alcohol, which has been the subject of a fierce Whitehall row, is a serious embarrassment for the Prime Minister.

Mr Brown made binge-drinking a major theme of his conference speech in Brighton, specifically singling out the powers to ban problem drinking throughout the community.

A Home Office spokeswoman said: “We are listening and responding to the strong concerns from the licensed trade who are concerned about responsible premises being caught up with the less responsible ones. We recognise that this is a big change but, having regard to the concerns of stakeholders at our consultation events, we think it is right to respond quickly while we have this opportunity.”

Later the Home Office issued a second statement denying that the powers had been watered down.

“The locally applied conditions in the mandatory code will be replaced by new, tougher powers for local councillors and licensing officers, making it quicker and easier for them to tackle problem premises by calling for a review to restrict or remove their licence without having to wait for the police or local residents to complain.”

Chris White, the chairman of the Local Government Association’s Culture, Sport and Tourism Board, said: “Local authorities have been arguing for more powers that they can use to tackle problems with alcohol locally but applying ‘discretionary powers’ would have been too difficult for them to implement. We welcome giving local authorities and MPs the power to instigate reviews as and when they see fit.”

The Bill will be debated in the House of Lords on Tuesday and is expected to be implemented in early 2010.

Times Recommends

• Please help: maimed children of war want their lives back
• Unlocking the cruellest prison
• Prince Charles named in £81m court battle