The industry claims many local shops and bars cannot afford the new levy.

Yesterday Ramsay McGhee, Scottish Licence Trade Association area manager, warned for many struggling businesses a crackdown by the board could mean closure.

"In many cases licensees just simply cannot afford it," he said.

"This annual fee hits everyone from corner shops right up to the big places."

He said while large supermarkets and hotels will not have a problem paying their fees, smaller, independent shops could struggle to find the money.

"If the board comes down heavy it could be the death knell of some businesses," he said.

Highland Council is owed at least £37,000 in unpaid licence fees and the city's licensing board will be told of the situation later today.

The annual premises licence fees - which vary from £180 to £900 depending on the rateable value of a business - were introduced last year as part of the new Licensing (Scotland) Act 2005 and should have been paid in October.

A full list detailing all 207 businesses which owe money will be handed to the licensing board.

It has the power to issue a final written warning to businesses or suspend or revoke a licence until the fees have been paid.

Board chairman Councillor Peter Corbett said yesterday he understood January was a tight time but urged businesses to pay up.

He is confident most will comply with the conditions rather than risk losing their licence.

"Just after Christmas and New Year we know money is tight," he said. "Like many people these companies are probably waiting for the last red letter and final reminder and that will come."

Without pre-judging the board's decision, Councillor Corbett said the most likely outcome of today's meeting would be to sanction final warning letters to licensees.

"We understand the situation regarding cash but the council has a business to run as well and it would be remiss of us not to chase them up," he said.

In his report to the board, area solicitor Donald Somerville said payment of the annual fee was a mandatory condition of holding a licence.

Money from the fees is used to help cover the council's administrative cost of processing applications.

Mr Somerville said yesterday he planned to give the board a verbal update on the number of outstanding fees as some payments had recently been received.

He said it was a new system and whilst licensees had not been invoiced they had been asked for the money.

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