Police have failed in their bid to get a Byron Bay nightclub to close at midnight.

They had identified Cheeky Monkeys as a troublespot for alcohol-related problems.

Byron Bay is rated number one in the state for offensive conduct offences and second when it comes to resisting and hindering police.

Police applied to have the backpacker bar’s closing time wound back from 3:00am to midnight.

But the Independent Liquor and Gaming Authority has ruled that the club can keep trading until 2:00am, as long as it complies with certain conditions.

They include a 1:00am lockout, drink restrictions, and an alcohol marshal on site every Friday and Saturday night.

Licensing sergeant Mark Gorton says the decision by the Independent Liquor and Gaming Authority is a significant one, which will send a message to all venues in the area.

“There are a number of venues in the Byron Bay area that do trade beyond midnight,” he said.

“This sends a clear message that there’s now a situation where crime and any incident related to alcohol is not going to be tolerated any longer, and appropriate action can be taken if it continues.”

The decision and conditions come into effect from midnight Friday night.