Campaigners are calling for rules on leafleting to be relaxed.
Protest group Manifesto Club has set up a petition calling for Brighton and Hove City Council to soften the regulations stopping unlicensed leafleters from handing out flyers.
A bylaw was introduced in 2008 to combat problems of littering around Churchill Square, North Laine and the Lanes.
Now, any company that wants to hand out leaflets in the area must apply for a £200 licence.
Each additional leafleter must have a £25 badge.
The rules also mean anyone without a licence can be fined hundreds of pounds.
Josie Appleton, director of the Manifesto Club, said that the rules were having a “phenomenal effect” on the city’s music scene.
She said the blame for littering was being unfairly placed on people handing out leaflets.
She said: “They shouldn’t be prosecuted for littering, the person who litters should be – they have committed the crime.
“More litter bins, common consent and personal responsibility are the true alternatives.”
The council said the aim of the bylaw was to ensure leafleters acted responsibly.
Pete West, the council’s cabinet member for environment and sustainability, said: “There is no doubt that since the rules and regulations around the distribution of leaflets and flyers were introduced, the amount of litter dropped in the city centre has reduced dramatically.
“This was particularly evident during the recent Brighton Festival when the potential for extra litter is huge.
“The scheme has been popular with residents and visitors who do not want to be handed dozens of leaflets during their visit to the city and we have a good working relationship with distributors, promoters and the major venues in the city.”
However some businesses are struggling under the rules.
Will Power, who runs a small marketing company in Brighton, said: “We have laid off five of our part-time staff as a direct result of this law and I know other venues and businesses have done the same.”
Brendan Fernandes, the owner of the Healthy Supplies health food company, said: “The system is bad for anyone wanting to publicise anything, and rather than tackling the problem, it’s just a way of getting revenue from people.”
The petition will be presented at a council meeting later this month.