People caught placing prostitutes' business cards in phone boxes in Brighton and Hove will face up to six months in jail or a £5,000 fine.
Ministers have confirmed a new law will be rushed through Parliament before the General Election to make littering phone boxes with soliciting cards an arrestable offence for the first time.
The move has prompted fears that prostitutes could be forced to tout for business on the streets.
Hove MP Ivor Caplin, who has campaigned for stronger action on this issue, said: "I am pleased that ministers have accepted the representations which I have made."
Ministers launched a consultation on the need to change the law in 1999. Last year they accepted there was a need to crackdown on the problem which mainly affects London and Brighton and Hove.
BT has to remove 14 million prostitutes' calling cards per year from phone boxes, a million of them in Brighton and Hove.
For the last five years the company has been disconnecting phone numbers advertised on the cards.
This, coupled with the removal of the cards, costs £250,000 a year.
Prostitutes in Brighton and Hove are worried the legislation will damage their livelihoods.
One woman said: "The fines are very expensive and to pay them it is likely prostitutes will have to go back out on the streets, creating a vicious circle.
"People doing this sort of job do not do it because they enjoy it - they do it because they need the money.
"Some of them have children to feed. I have had my phone cut off numerous times by BT which makes it very hard for me to work."
Another prostitute said: "They should ask people just to put their name and phone number so nobody is offended. They should also realise the law is pointless because in a couple of years most phone boxes will disappear because most people have mobiles."
Labour councillor Bob Carden, chairman of the city council's police and public safety committee, thinks the law will create red-light districts.
He said: "It has to be made possible for people who want to do this to do it safely. I'm concerned when the law is brought in that it could have disastrous consequences for the girls in the trade."
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