A landlord is planning to put on strippers because the smoking ban has killed business.
Plans for exotic dancing in the Portland Hotel, Portland Road, Hove, have been met with fury by residents.
But John Sturgeon, the joint licensee for the hotel and pub, said the main thrust of the application was to allow smokers to satisfy their habits until 4.30am, rather than turn the venue into a strip club.
He added that if he does decide to hold events they will not involve full nudity.
He said: "Smoking has killed the trade and we need to do anything we can to pay the bills.
"We are not trying to upset anyone and if we do use it would be table dancing and it would not be regular."
He added that his current licence does not allow smokers outside after 11pm.
If the licence is granted, it would become the sixth venue to hold exotic dancing in the city.
For many years just two strip clubs operated and did not offer fully nude dancing.
But new licensing laws have left the council and police almost powerless to turn down applications.
Brighton and Hove City Council is seeking a Private Bill in Parliament to limit the opening of new strip clubs.
Celia Barlow, MP for Hove, has written to the chairman of the council's licensing committee to express her opposition.
She said: "This application is utterly inappropriate for a residential area such as Portland Road.
"There are a large number of young families in this area, as well as a local junior school.
"These clubs have no place in a community such as this.
"I hope the licensing committee rejects this idea for the madness it is."
Neighbours in the Poets Corner area of Hove are also horrified at proposals on their doorstep.
City councillor and prospective Green Parliamentary candidate for Hove Ian Davey lives just 100 yards from the venue.
In the space of four days neighbours have gathered more than 50 letters and a petition with 150 names objecting to the proposals.
Coun Davey said: "Local residents are both shocked and scared by this move from the pub to set up a pole and lap dancing establishment on their doorstep.
"Whilst this is a generally peaceful residential area, residents like many others in the city are suffering increasingly from sleepless nights as a consequence of ever later licences.
"They fear that this will only worsen should this outrageous proposal to allow lap dancing late into the morning be granted."
Consultation has now closed but because of opposition to the move a licensing committee will rule on the application in the New Year.
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