Angry residents fear their summer could be ruined after Hackney Council erected a giant circus-style tent with plans for it to hold entertainment events and late-night drinking.

Work has already begun on Hackney House, a large tent near Old Street Tube Station in Shoreditch High Street, which the council hopes will “showcase” the borough.

The council granted itself planning permission earlier this month, and is now applying for a premises licence to allow the venue to serve alcohol, host musical performances and dance facilities, and open seven days a week until midnight or 11pm.

But a group of residents and business owners have banded together to fight the plans.

South Shoreditch Community Association member Matt Johnson, 50, a producer who lives near Hackney House, is worried his new baby will be disturbed by revellers at what he claims will be a “massive beer tent”.

There are strict controls on the number of Shoreditch venues because the town hall declared the area a “saturation zone” due to antisocial behaviour, and Mr Johnson criticised the council for opening a new one.

He added: “It is a dereliction of duty and an abuse of power by Hackney Council.

“Hackney Council claim they wish to ‘showcase Shoreditch to the world’ for the Olympic Games.

“But is encouraging people to drink themselves into a stupor in Shoreditch really the best method of celebrating a global event that promotes health and vitality?”

Noah Crutchfield, who owns Maiden shop, fears the seven-day-a-week alcohol licence could cause problems for the area and negatively affect his business.

And resident and business owner Rachel Munro-Peebles said she believes the council “rubber stamped” its own planning application.

But a council spokesman denied the decision was a done deal before the planning committee gave the application the go-ahead on April 4.

She said: “A tent had been hired in advance, but if the planning application had been unsuccessful, it would have been cancelled.”

Work to level the car park had started before the approval because that was due to happen anyway, she added.

Hackney House will serve as a showcase for the borough’s businesses, she said, as well as being “a resource for the thousands of journalists in London for Games time – a place to work and socialise and to take home the message across the globe that Hackney is the heart of London and the place to live, work and invest”.