Council ordered to put the brakes on 'nightlife tax'

Judge warns of risk to West End businesses if Westminster goes ahead with parking charges

The Mayor said the council had made ‘the right decision for Londoners’ (PA)

Theatre-goers, restaurateurs and night workers throughout London's West End were celebrating yesterday after plans to introduce evening and weekend parking charges were shelved until after the Olympic Games.

The proposed charges, dubbed a "tax on nightlife", had infuriated impresarios and business owners alike. They have been temporarily dropped after a High Court judge said they risked damaging local businesses.

Allowing a judicial review of the plan, Mr Justice Collins said: "There is a real risk of substantial damage to businesses and churches if it goes ahead." He ruled that the overnight charges of up to £4.80 per hour must not be introduced until judicial proceedings were concluded, adding that the current consultation process was "arguably far too limited".

Following the ruling, Westminster City Council decided that the charges, due to be in place during the normally free periods on Monday to Saturday evenings and from 1pm to 6pm on Sundays, should be put off until after the Olympics.

The council leader Colin Barrow, who had attempted to push through the plans as early as 9 January next year, said: "London faces many challenges in 2012 and we do not wish this public debate to become a distraction to preparations for the Diamond Jubilee and the Olympics." He said he recognised the "significance" of the judgment and said the council would discuss the policy and "continue to listen to the concerns of residents, visitors and business". The news will come as a blow to the council as well as the parking firms that were set to enjoy a windfall from the new charges.

Westminster Council has signed a turnover rental agreement with the car park operator Q-Park to run its facilities, meaning that the more revenue the company makes from people forced to use its car parks, the more it will pay to the council in rent.

Enforcement of the parking rules was contracted out to the NSL, formerly part of the car parking firm NCP, which employs traffic wardens in Westminster. The company's director, Mark Underwood, put its recent "excellent" financial results in part down to retaining contracts with Westminster City Council. Mr Underwood himself took home more than £1.2m in salary, bonuses and other payments in 2010.

Labour mayoral candidate Ken Livingstone said the council should "drop rather than delay its plans". The Michelin-starred chef Michel Roux Jnr told the London Evening Standard: "I'm very happy but we can't open the champagne just yet. The council has to realise it was wrong. It must not waste any more money and time fighting this in court."

The Mayor of London, Boris Johnson, said: "I applaud [Mr Barrow's] wisdom and bravery in making the right decision for Londoners at a tough time for the economy." However, the council leader – who is also a millionaire chairman of the hedge fund Alpha Strategic Ltd – insisted that the plans should still go ahead.