The proposals include sex workers being registered, with yearly medical checks. The dozens of premises used by prostitutes would be regularly inspected by the council's health department and police.
If the scheme is successful it could be adopted by the other South Yorkshire towns of Doncaster, Barnsley and Rotherham. Eventually, it may be used through the country.
South Yorkshire Police and Sheffield City Council are examining whether existing by-laws can be used to force the licensing of establishments, many of which act as brothels.
The police have been running an informal project for the past year in the Attercliffe business area of Sheffield, where the owners and staff at about six saunas and massage parlours are allowed to run their businesses but under scrutiny.
The attempt to formalise this across the whole of the city is a response to concerns about the growth in sex for sale from saunas and massage parlours, and houses being used by escort agencies.
The police believe licensing premises would give them greater control over how they are run and help ensure they are safe from infection and disease. They also believe they can better prevent violence and drug-dealing and keep the establishments out of criminal hands.
Getting prostitutes off the streets is also considered a far safer option for the women, who are not so open to assaults and abductions. It also eliminates kerb crawlers and complaints from residents about finding condoms on the streets. In an interview in The Economist magazine, masseuses working in Sheffield said they felt safer and better protected than when they were working the streets.
But the women are wary of registration because they fear their identities and their profession will become known by their families and tax officials.
Any attempt to legalise, even if brought via the back-door route of licensing, is bound to provoke outrage from church and community groups.
A previous proposal to set up an official "zone of tolerance" for prostitutes in Sheffield was scrapped after business people in the planned red-light district strongly opposed the move. The Rev David Holloway, of the Church of England's Reform group, said then: "Changes like this give the message, `This is all right', instead of saying, `This is all wrong'. Britain needs more permissiveness like a hole in the head."
South Yorkshire Police is keen to down play suggestion that it is taking a soft approach to prostitution. Superintendent John Hudson, the commander for the Attercliffe area, said: "This is not an attempt to legalise prostitution. It's a method of controlling who runs this kind of business and allows us to keep an eye on what goes on."
John Derricott, chief licensing officer at Sheffield City Council, has been asked to examine whether existing local government by-laws can be used to cover saunas, massage parlours and escorts. The council meets Home Office officials in London to discuss the proposals later this month. Any measures would need aproval from the full city council.
The council's newly elected Liberal Democrat leader, Peter Moore, said the issue needs careful discussion. "I have a very open mind," he added. "Clearly, no one wants to see more street prostitution."Reuse content