David Howell, the head of Danetre School in Daventry, was warned he would be liable if the We Will Rock You show, based on the music of supergroup Queen, went ahead against the advice of the district's licensing officers.

Daventry District Council said the school needed a temporary entertainments licence because it was charging people for admission to the show, scheduled to start last night.

But Mr Howell said the performance was not being staged to make a profit and was not open to the general public, so therefore should have been exempt from needing a licence.

Despite last-ditch attempts to save the musical extravaganza, it was finally postponed on Friday.

Mr Howell said: "The children are all desperately disappointed.

"It is a shame that organisations we work in partnership with have not managed to offer us the help and support we needed to put on the show.

"I was told that, if we did go ahead, I personally would be liable for prosecution and, if found guilty, could be fined up to £20,000."

Daventry District Council has said an application for a temporary event notice (TEN) was received from the school too late for the 10-day notice period required.

But Mr Howell said the TEN submitted to officers had nothing to do with the play, but referred to an application to run an interval bar at the school.

He added: "I am still of the opinion we don't need a licence at all. It finally got to the stage where I said I would give everyone their money back at the door, just so we could go ahead. But I was told that would not do, so I have had to postpone it for two weeks."

The council's managing director, Simon Bovey, said: "We understand the school's disappointment and our licensing officer has been in regular contact with the school since early last week, to try and find a way around these licensing issues.

"However, following extensive legal advice, we are unable to apply discretion to this case.

"There is absolutely no question of the council 'banning' this event; we are unable to change the licensing laws. We have advised the school to reapply for a TEN within the legally-required timescales. I understand the school has now decided to do this.

"We will be advising the school further on licensing matters, including consideration of an application for a premises licence, which would likely help them in the future."

Chairman resigns in protest
The chairman of Daventry District Council's licensing committee has resigned in protest at the debacle.

Councillor Ann Carter (Con, Walgrave) said the Licensing Act 2003 was preventing people holding fundraisers.

She said: "The council was just administering the law and didn't have a choice in the way it dealt with this.

"We are now getting to the stage where people are having to apply to host cheese and wine evenings in their own homes, because they will be selling alcohol for money.

"The form is five pages long and it is in danger of killing off the age of fundraising."