Steep Hill is located in the heart of historic Lincoln

The chairman of the Bailgate Guild, David Brammer, who owns House of Wines, said a derelict pub - the Old Wig and Mitre - is an eyesore.

The owner of the pub, Samuel Smith Brewery, has refused to comment about its plans for the site.

"Work on the pub has come to a halt - it definitely affects the image of the area" Mr Brammer said.

Business levy

Alison Clarke of Pimento Fashions said: "The empty shops don't do the image of the area any good whatsoever - they don't have the appeal for tourists or locals.

"The high overheads and high fuel costs and high rates are some of the reasons for these problems," she said.

Lincoln City Council recently promised to spend �1.5m on improvements in the city centre as part of a business levy scheme.

The project is funded by a levy of 1% of the business rate, which goes to the Business Improvement Group.

The money is being spent on improving street management and helping develop marketing and events.

City marketing spokeswoman Amanda Batham said the retail sector across the UK has been hit by a downturn.

She added that the city meets the Bailgate group every month to map out strategy.