Controversial plans to hike fees for street-trading licences are set to be scaled back following an outcry from businesses.

In February Croydon Council launched a consultation on proposals to make traders pay for outside space by the square metre, to replace the annual £89 flat fee currently charged.

But the plan was labelled a "tax on sunshine" after some businesses calculated their rates would increase by more than 2,500 per cent, and a petition against the scheme amassed more than 2,000 signatures.

Yesterday councillor Mark Watson revealed these original plans had been toned down ahead of consultation report's publication set for later this week.

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The report will suggest a £2 per sq m charge for outside trading space, rather than the £3 initially, suggested, and a £1,5000 annual cap on license fees.

Businesses will also be able to pay for six-month licences to take into account seasonal trading patterns, with new sign-ups receiving a 75 per cent discount in their first year, Cllr Watson said.

The petition against the increases was launched by Saif Bonar, owner of town centre cafe-bar Matthews Yard, after he calculated his fees for providing outdoor seating would rocket to £2,496 a year under the new charges.

Cllr Watson said: "We knew people who were paying £89 were going to have to pay more, and businesses wouldn't like that.

"We're not going to cut other services to pay for this, and we do want people to have tables and chairs outside, but it's only fair for those businesses who make money from that [to pay for it].

"It's not a tax, it's a fee for a service."

Bars and restaurants that have tables on public land and shops with outdoor fruit-and-veg stalls would be among the businesses affected.

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