Colin Neill, chief executive of Pubs of Ulster, the representative body of the licensed trade in Northern Ireland, said it could cause irreparable damage to the licensed trade in the county.
Pubs of Ulster, publicans and MLAs are to meet with police in Irvinestown tonight (Thursday) to discuss the situation.
It follows the prosecution of Enniskillen publicans Trevor Robinson, of the Tipplers Brook, and Mark Drumm, of Magee's Spirit Store, for allowing after hours drinking and a subsequent landmark legal ruling.
At the centre of the dispute is what is known as an Article 44 extension. Pubs are allowed to sell alcohol up to 11pm, and stay open until 11.30pm to allow customers to finish their drinks.
However, most pubs in Fermanagh have Article 44 extensions, permitting them to sell alcohol up to 1am, and remain open until 1.30am for customers to finish their drinks, but only on nights they are providing live entertainment or a substantial meal.
In a landmark legal ruling at Fermanagh Court on April 11, 2011, District Judge Liam McNally convicted Drumm and a member of his staff for permitting after hours drinking in Magee's Spirit Store, which, ironically, is just yards from Enniskillen Courthouse.
Drumm had an Article 44 extension but crucially, was not providing live entertainment nor a substantial meal.
The District Judge said that in his experience "the extension to the permitted hours under Article 44 is commonly abused throughout the jurisdiction and applicants frequently apply for an Article 44 extension from Monday to Sunday inclusive, even though they do not intend to regularly utilise same by the provision of live entertainment on each of these nights".
Setting out guidelines to help publicans keep within the law and the police in enforcing the law he said publicans should only apply for an Article 44 extension for the days they intend to habitually provide live entertainment.
"If no live entertainment is provided, intoxicating liquor may only be sold up to 11pm and consumption is permitted only up to 11.30pm," he emphasised.
In a separate case he also convicted Robinson of permitting after hours drinking in similar circumstances.
Robinson appealed his conviction at the County Court and lost. He took it to the Court of Appeal and again lost his case.
In his ruling in the Court of Appeal, Lord Justice Girvan praised the "admirably clear and well reasoned decision" of District Judge McNally in the Drumm case and endorsed his guidelines to police and publicans.
The Court of Appeal gave its decision on September 25, and when publicans subsequently went to renew their Article 44 extensions before District Judge McNally, many were met with objections from the police.
There are around 160 licensed premises in Fermanagh and it is understood that police objected to 58 pubs being granted Article 44 extensions.
One Fermanagh publican who did not want to be identified said: "They're opening a can of worms that they may not get the lid closed on again."
He said business was already suffering as a result of the smoking ban, drinking and driving laws and rates which are 30 per cent higher than other businesses.
However, he said the biggest impact on pubs has been the cultural change whereby people buy cheap booze from supermarkets and drink it at home, where they don't have to worry about a smoking ban nor drinking and driving.
"It's startling the number of pubs that are closing. You only have to look at the number of pubs that don't open until teatime," he said.
Colin Neill added: "The pub trade, especially in rural areas, has been going through a very difficult time in recent years. The on-going downturn in the economy and the subsequent impact this has had on footfall and turnover, has left many publicans struggling to get by. Any measure therefore that forces a pub to close early, losing valuable trading hours, will have a very damaging effect on many local businesses.
"The damage to business will also have a knock on effect on local employment, putting hundreds of local jobs at risk if pubs are forced to close," he warned
"We must also consider the effect early closures will have on Fermanagh's tourist economy, of which pubs play a vital role in the unique local offering. In addition, Enniskillen is one of only four Purple Flag areas (for the quality of its night life) in Northern Ireland and this status could be in jeopardy if this latest clamp down on Article 44 applications impacts the night-time economy," stated Mr. Neill.
Superintendent Alywin Barton stressed: "We are not in the business of closing pubs."
He said police had been in discussions with publicans and their solicitors and reached agreement in many of the cases.
"There's another small number that are the subject of on-going discussions," he stated.
He suggested "significantly less than half" of the 58 cases had still to be settled.
"Very, very few will go to a full hearing in court," he added.
Superintendent Barton said the Court of Appeal decision made it clear that Article 44 extensions should only apply to nights when a pub is habitually providing food or entertainment.
"A significant number had late opening seven days a week, 52 weeks of the year," he explained.
He said a lot of them only provided live entertainment at the weekends, so why do they need the extensions on the other nights of the week?
Superintendent Barton said there was a "significant number of well-run premises, looking after their clientele and the people living around them". However, the police had been looking at the issue for a number or reasons including the level and degree of violence on the streets, complaints from local residents and from other publicans and "emergency staff in hospital being subjected to dogs abuse and violence".
He stressed that the police are "keen to support a safe social economy" and recognise that it is a "hugely important element for the economy of Fermanagh and tourism".