The proposed law will mean pubs, clubs and venues in England and Wales will need to get a new-style licence from their local council before putting on live music.

Musicians' leaders had feared performers could be faced with fines of up to �20,000 or a jail sentence for appearing in an unlicensed venue.

Now the government is tabling an amendment to its bill to ensure bands and solo acts are not punished for appearing in unlicensed venues.

Culture minister Kim Howells has also invited musicians to join a working group to debate the guidelines councils will have to follow when they award licences.

I want to ensure the bill is enforced with a heavy dose of commonsense on the ground Kim Howells

The new bill will mean councils take charge of all licences for pubs, clubs and venues - at present, this is split between local authorities and magistrates' courts.

Mr Howells said: "Our principle is clear - we want to spread live music. The licensing bill will do that.

"I want to ensure the bill is enforced with a heavy dose of common sense on the ground."

The bill, if passed, will also see pub opening hours liberalised across England and Wales.

Musicians' Union leader John Smith said he was "pleased" with the Department for Culture, Media and Sport's "partial climbdown".

WORKING PARTY MEMBERS

Arts Council of England British Beer and Pub Association Local Government Association Government music adviser Stephen Navin

"We welcome the amendment to the bill, which could have seen musicians criminalised just for doing a gig," he told BBC News Online.

Mr Smith, who is meeting Kim Howells to discuss the bill next month, also hailed plans to toughen up the guidelines for local councils to ensure the new law is applied easily across the country.

"It certainly moves us away from the department's extraordinarily arrogant behaviour when it was not accepting any of our reservations about the bill," he added.

UK actors' union Equity was also "delighted" with the amendment.

'Irony'

Billy Bragg and MPs have protested against the bill

Its spokeswoman Kelly Wiffen said: "This change means performers can make full use of the new employment opportunities we hope the bill will deliver."

The Musicians' Union, however, is still concerned that other forms of entertainment will still not need a licence.

"It's a fantastic irony that pubs can show big-screen sport without a licence, but they would need one to put on a small folk duo," Mr Smith said.

Mr Smith said the Musicians' Union was hoping to join the working group, while Ms Wiffen told BBC News Online that Equity would consider it.

"We want to work to make sure local authorities don't abuse their position," she added.

Kim Howells: "Ridiculous myths"

The Arts Council of England is already in the group, along with industry and local government representatives.

Mr Howells is also issuing a booklet which he says contains 20 "myths" about the bill.

It says performers will not need a licence themselves, and nor will music shops, community buildings such as village halls, churches.

Spontaneous pub singalongs or carol singers will not need council approval, nor will events like nativity plays or wedding receptions.

Alcohol licence

But Musicians' Union leader Mr Smith said the list was still too vague, and open to abuse by local councils.

"The list still contains a lot of scenarios where 'this may happen...' - we don't know what that means," he said.

Mr Howells claimed the bill would make it cheaper for most venues to put on live performances, as they would no longer need separate alcohol and entertainment licences.

A House of Lords committee has just finished examining the bill before it gets its third reading, and returns to the House of Commons.

Ministers hope it will be law by the summer, and fully implemented within a year.