A LEGAL loophole could prevent the prosecution of businesses accused of selling alcohol to underage drinkers.

The decision by York City Council to drop 16 prosecutions after a judge's ruling could have wide implications across the country.

The council abandoned the cases against the owners of bars, pubs, hotels and restaurants after a district judge said he did not believe licence holders of premises were liable for prosecution.

The authority carried out a test purchase operation last December in which a number of venues served people under 18.

Cases against three companies made it to court, where District Judge Martin Walker said he did not believe licence holders were liable for the underage sale.

The council said 16 prosecutions were not being pursued as a result of Judge Walker's comments.

Licensing lawyer Graeme Cushion, who represented the three companies, said it was not a binding judgment because a full hearing into the case was never held.

However, he said the judge's comments were a strong indication of what a court's view might be.

Mr Cushion said the cases were hugely significant for the rest of the country

A number of prosecutions have already been dropped in London as a result.

He said: "The York situation is currently being used to encourage other authorities considering doing the same thing to desist."

But a spokesman for Durham County Council said the cases would not have any impact on its test purchases.

A North Yorkshire County Council spokesman said: "We have no ongoing cases which would be affected by this decision, and will continue to review each case individually on its facts before deciding on appropriate action to be taken against anyone who sells alcohol to someone under 18."

Under the new Licensing Act, outlets serving alcohol must have a premises licence-holder and a designated premises supervisor.

Mr Cushion argued in court that the Act does not specifically say the premises licence-holder is responsible for underage sales so, in future, prosecutions may only be brought against the landlords or the bar worker who sold the alcohol.

York City Council's deputy leader, Andrew Waller, said: "It means that the duty of care that employers have for the individuals who sell alcohol is effectively removed."