Michael Saltmarsh says holidaymakers have been disgusted by the quantity of sewage on the beach at Croyde Bay, north Devon.
'I've been left with no choice but to claim damages and apply for injunctions to stop the sewage being continually pumped into the sea. If I don't make a stand I might as well close shop', he said.
Mr Saltmarsh bought the beach five years ago and has invested pounds 2m on its development.
At the head of the bay is an outlet which discharges sewage. Foam and faeces have been found floating in the sea. South West Water Company PLC are responsible for the sewage outlet, but the onus has been on Mr Saltmarsh to clean up the beach.
'We can handle the tampons and the condoms - at great expense - but not the brown slick,' he said.
In 1991 Mr Saltmarsh applied for a 'blue flag' beach cleanliness award but this was refused and bookings have dropped drastically.
South West Water said last night that the bathing water complied with EC standards.