Gary Lewis, owner of Pussycats in Church Road, Hove, said he and his dancers were outraged by the claim made during a licensing hearing.
Mr Lewis, 42, who describes himself as 'a law abiding Christian', said: "The girls are very upset, angry and distressed.
"He has basically called them prostitutes.
"That sort of thing just doesn't go on. If people want that, there are places they can go.
"My club is not seedy. We are very strict at following the rules."
The 40 dancers strip to a G-string during their routines and stand at least 3ft away from the customers.
Many of the women who dance at Pussycats are students, mothers or office workers who want to earn extra cash.
Mr Lewis said: "We have people who travel down from London to come to the club because they say the girls are more natural and less seedy."
ASussex Police spokeswoman said: "With a lap-dancing club, police will understandably have certain concerns. But the comment made in court was inappropriate and we apologise."
But Pussycats is demanding a written retraction from PC Chris Lewis, who made the comment.
If a written apology and retraction is not received, the club-owner said the dancers would demonstrate outside Hove police station.
Mr Lewis also wants returned a CCTV video that was removed from the club by a police officer.
He said: "We've got nothing to hide. If there's something on there, let me see it so I can answer the allegations."
Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.
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