The Home Office has asked Mid Devon District Council to revoke the premises licence at Belluno, an Italian restaurant in Newton St Cyres, effectively shutting down the business.
The Home Office Immigration Enforcement directorate claims the restaurant was employing staff whose immigration status disqualifies them from employment in the UK.
The restaurant denies the allegations and describes them as unproven.
Although Devon and Cornwall Police has no record of any problems at Belluno, the Home Office is seeking the maximum penalty available under licensing law.
In its application to the council it says that anything less “is insufficient to act as a deterrent to the licence holder and other premises’ licence holders from engaging in criminal activity by employing illegal workers and facilitating disqualified immigrants to work illegally”.
The council’s licensing subcommittee meets tomorrow in Tiverton to consider the Home Office application.