A new push to save one of London’s most famous nightclubs, Madame Jojo’s, from closure was made on Thursday when Westminster’s Labour councillors called for new management to be allowed to take over the Soho venue.

The council revoked its licence last month following an incident outside the club in October when its security staff became involved in a dispute with a customer.

The police report into the incident, which culminated with the bouncers allegedly attacking the man with baseball bats, called for the Madame Jojo’s licence to be suspended and then fully revoked.

The manager and security staff were replaced with workers approved by Westminster, but the council still decided to withdraw the licence.

Councillor Paul Dimoldenberg, leader of the council’s Labour group, described the incident in which the customer was attacked as appalling but said that should not be used to justify “the remorseless process of Soho gentrification”.

He said: “Madame Jojo’s is a Soho icon and these premises should not be turned into yet another chain restaurant. We support the reopening of the premises under the same licensing terms should another responsible owner wish to take over.

“Westminster council should not let Madame Jojo’s die, but should do all it can to keep this unique Soho venue living on under new management.”

Marcus Harris, the co-promoter of the weekly White Heat night that gave many big bands one of their first gigs, said the swift decision by the council to close the venue reflected its desire to rid Soho of its more distinctive elements.

“It seems that the council just used the incident as a good excuse to take away the licence,” he said last week. “It’s one of the few places left round there which has a 3am licence, seven nights a week. If you look at the way the area is changing, they clearly don’t want a late night drinking presence anywhere in Soho anymore.”

A nightclub has existed on the Brewer Street site since the early 1950s and has featured strippers, cabaret artists, drag queens and club nights ever since.

It was bought in the 1960s by porn baron Paul Raymond, who owned large parts of Soho and did little to alter any of the properties.

The calls to save the club may fall on deaf ears given that almost a year ago the council approved plans submitted by Soho Estates, the company founded by Raymond, to redevelop the buildings around Walker’s Court and Brewer Street in the next few years.

The gentrification of Soho has continued with the opening earlier this year of the nearby Ham Yard Hotel owned by the Firmdale chain, whose other boutique properties include the upmarket Charlotte Street and Soho hotels.