Red tape introduced in the 2003 Licensing Act is stifling small-scale gigs and performances, a report commissioned by ministers has found.

A West Country brass band has been told that it could only play religious songs when performing for charity in a town centre – or pay for a licence that could cost more than the band would be able to raise.

A male voice choir cancelled its outdoor performances after being told by the local council to sing religious songs or pay for a “temporary event notice”.

A group of elderly men who regularly sang folk songs in a room above a pub were told that the landlady would need a variation to her premises licence if they were to continue.

The report from the Live Music Forum says that some “perfectly reasonable, harmless” events have been negatively affected by a lack of clarity in the Act.

Feargal Sharkey, the chairman of the forum, said: “Everybody just needs to stop for a second and think – are we trying to build a society where a bunch of elderly gentlemen can’t sit in a room above a pub singing songs to each other without someone telling them they shouldn’t?”

The report says that the Government must intervene to recreate the student rock gig circuit that produced bands such as Pink Floyd and the Smiths. The forum, which reports to the Department for Culture, Media and Sport, found that the most serious difficulties were being felt in the student circuit.

It said: “Since the 1950s the nationwide network of performance facilities provided on and off campus by student unions was an invaluable resource for live music and a fertile breeding ground for lots of artistic talent.” But this network was now “economically, creatively and culturally” in decline, “leaving a visible gap”. The decline that began in the 1980s was hastened by the rise of dance music, which led student unions to replace bands with lucrative DJ club nights.

However, fears that the number of concerts would be halved under the new regime proved unfounded. Overall, the forum found that the Licensing Act has had a “neutral effect” on the live music scene. The new laws have delivered benefits, such as the removal of a separate fee for live music and the need to renew licences annually.

Explore Music

• Festivals

• CD Reviews

• Live Reviews

• Classical

Editor's choice

• U2 at Nou Camp Stadium, Barcelona
• The 50 Best Movie Villains
• The 15 golden rules of theatre etiquette