Home Office Minister George Howarth said: "New Year's Eve is already a special occasion for many people, and the start of the millennium will be a particularly important event.

The government favours the all night option for the millennium

"A general relaxation of normal hours for each New Year's Eve would remove a significant burden for the licensed trade. It would also benefit the courts and the police service who have to consider each application."

The Home Office consultation paper outlines options of allowing pubs to stay open until 11am and 4am.

The government prefers the first option of an all night relaxation of licensing hours, which would let pubs stay open until standard opening time the following day.

The Home Office is now seeking views from pub owners and the public on the proposed changes.

"We expect the vast majority of licensed premises will want to stay open well beyond closing time, typically for local parties and other events to welcome the start of Year 2000," Mr Howarth said.

Although the changes will not come into force in time for this year's Hogmanay celebration, they could apply to future New Year's Eves once they are in place.