Sadiq Khan has formally demanded that Westminster City Council abandon proposals that would create a presumption against new pubs, bars and clubs opening in Soho and the West End, in a submission filed as the council's licensing consultation closed on Sunday.

The mayor's response to Westminster's draft Statement of Licensing Policy asks the council to "remove this cumulative impact policy altogether, instead setting out a positive vision of the economic growth that is being promoted, rather than the activity that is to be restricted". He also calls for proposed restricted zones covering Mayfair and Victoria to be dropped, along with the council's "core hours" policy.

The intervention, first reported by the Guardian, follows the same paper's disclosure that the draft policy encourages venues to move towards table service and away from what it terms "vertical drinking". The published wording proposes to "discourage excessive drunkenness and encourage the provision of more seating in premises that serve alcohol for people to sit and enjoy a drink and order food by table service in place of open bar space that caters for high volume vertical drinking".

City Hall has been briefing that the mayor is exercising new powers granted this year under the English Devolution and Community Empowerment Act, which received royal assent on 29 April. The position is more qualified than the framing suggests. Boroughs are already obliged to consult the mayor when preparing a licensing policy, but the Greater London Authority's own guidance states that the procedure for exercising a call-in power over individual applications "will be set out by the government in secondary legislation, expected to be laid and passed later this year". On that reading, Sunday's submission is a statutory consultee response rather than a binding direction.

The substance of the dispute is policy CIP1, which would "normally refuse" licences for pubs, bars, fast food premises or venues offering music and dancing inside the West End cumulative impact zone — broadly the area between Oxford Street and Trafalgar Square, taking in Leicester Square and Soho. Such zones create a rebuttable presumption rather than an outright prohibition: applications are refused unless operators can show they will not add to existing cumulative impact.

A spokesperson for the mayor called the proposals "restrictive and anti-growth", warning they "would leave our venues facing extinction". Khan has repeatedly contrasted Westminster with Manchester, which he says has "a more enabling approach, with no core hours policy, no cumulative impact policy".

"You can't run a world-famous nightlife district with a village-hall mindset." — Sadiq Khan

Westminster, which returned to Conservative control in May, has rejected the characterisation. The leader, Cllr Paul Swaddle, said: "There is no plan, and never has been, to ban drinking while standing up in a Westminster pub. This is about safety, not stopping anyone standing at a bar with a pint in their hand." He added that the council did not "need lectures from City Hall on backing hospitality when they have directed the police to object to every new licence application" — a claim not independently verified.

The deputy leader, Cllr Tim Barnes, said suggestions of a ban were "a wilful misreading of the policy proposals", and that there was "little change here from the policy of previous administrations". Labour ran the council until May, and the underlying cumulative impact assessment was already being criticised by the Night Time Industries Association in April.

Downing Street intervened last week, with a spokesperson for the prime minister, Andy Burnham, saying: "Busy pubs full of people talking to each other is not a public nuisance, it is British life, and it is thousands of jobs."

The Soho Society, which examined 161 licensing applications last year, maintains that residents face unacceptable noise, crime and litter. The final policy is due to take effect on 1 October. Westminster has been approached for comment on the mayor's submission.