Late-night businesses that are still unable to trade should have their losses compensated by the government, the Night Time Industries Association (NTIA) has said.
Venues such as nightclubs have no set reopening date and face an uncertain future following the announcement of stricter tier restrictions for England yesterday.
The NTIA, which represents 1,200 bars, clubs, casinos and music venues, said the inability to trade over the key festive period leaves many businesses facing "a long winter fighting to survive".
"The government must compensate these businesses for the period of time they have been closed, and the loss of business suffered due to restrictions through the festive period," added Michael Kill, chief executive of the NTIA.
Many operators are still having to pay a late-night levy despite having to close by 11pm, while some have been unable to reopen at all. Local authorities do not have the power to cancel or freeze the payments, and there have been calls for the government to intervene on the issue.
Business secretary Alok Sharma was reportedly due to meet bosses from club and bar operators including Deltic Group, Revolution Bars, Stonegate and Fabric this week to discuss a lifeline for the sector, but it is understood the meeting was delayed.
The NTIA has warned nightclubs face "extinction from UK culture" without further government intervention.
Deltic was trading from around 50 late-night bars and clubs in March but put itself up for sale in October in a bid to stave off bankruptcy. A spokesperson for the business confirmed it had received "a number of credible offers" to buy the company and was in negotiations with landlords to extend a rent-free period on its sites.
Revolution Bars closed six sites and moved to a turnover-based rent on seven others after entering a Company Voluntary Arrangement (CVA) this month.
Kill said: "The sector has suffered horrendously since the start of the pandemic and is bearing the burden so that other sectors are able to open during the festive period."
Yesterday the bosses of more than 50 pub and brewing companies, including Greene King, Heineken and Marston's, wrote to the prime minister with a similar warning that the sector faces ‘ruin' without more generous government support.