A late-night tax could be introduced to bars and pubs in Dalston following an investigation raised concerns that the night-life spot had reached saturation point.

The report was commissioned after police raised concerns that the growth of the area’s drinking culture had peaked – amid accusations of people having sex in the street and defecating in front gardens.

As recommended in the review by The Living in Hackney scrutiny committee last week, the council will consider introducing a late night levy – a government scheme allowing authorities to charge late-opening bars to raise money for policing.

Hackney now has the largest night-time economy outside of Westminster, which includes Soho and Covent Garden.

Borough commander Matthew Horne told the Gazette: “Unlike Shoreditch, Dalston is a residential area. You get to a stage in a family area where it must reach a tipping point.

“We have got evidence of people having sex and defecating in front gardens. There’s also a crime issue. We are not suggesting people don’t have a good time but we must address the issue.”

He said the volume of people coming into the area – estimated to be tens of thousands – also made visitors and residents targets for criminals.

He said the number of thefts quadrupled on Friday and Saturday nights, with 49 per cent of thefts involving mobile phones.

Ch Supt Horne added: “It’s not that we can’t police it. We have reached the point that it’s growing and growing. We think it’s big enough and we need to limit the growth.

“It’s a concern that we leave other areas with fewer officers as we put more officers into Dalston. On a quiet night we have an extra 15 to 20 officers patrolling the area.”

The council will also look at whether there are enough licensed premises in Dalston.

Ch Supt Horne stressed licence-holders were responsible people and this was not about “demonising licence holders”.

Businesses can currently opt to pay a voluntary levy, which pays for extra street wardens and street cleaning.

Tom Gibson, owner of subterranean drinking den Ruby’s in Stoke Newington Road, is already paying £175.

He said: “I would support the measure to make it compulsory as it would not change anything we are already doing – a lot of which goes under the radar.”

Deputy Mayor Cllr Sophie Linden said in a statement: “Some pubs and clubs are paying into a fund to ensure there are extra wardens to deal with some of the anti-social behaviour that arises.

“Their work makes a noticeable difference for residents.

“We are looking to expand this fund to other areas and will assess how successful this is, rather than introduce a blanket night time levy at this point.”

In September, the council will extend the voluntary night-time fund to Shoreditch and consider whether to introduce a night-time levy there.