Some tourists are shopping out of town rather than in central London

Part of the central London street will be closed to traffic on 1 October to make way for acts including Charlotte Church, Rachel Stevens and Liberty X.

The Dress to Impress themed event will include entertainment and giveaways.

Marks & Spencer boss Stuart Rose came up with the idea and has backing from business rival Philip Green, director of Bhs and Arcadia Group.

Retail sales plummeted in the wake of the July bombings because tourists and shoppers were put off.

I am delighted that our companies are participating in this celebration of its heritage and success Philip Green, director of Bhs and Arcadia Group

Figures from the London Retail Consortium showed July sales dropped by 9% on last year.

Mr Rose said he came up with the idea one month ago.

"Philip Green was the first person I called. He immediately thought it was a great idea and, once he was on board, everyone was quick to follow," he said.

Mr Green, a retail billionaire, said: "London is one of the major cities in the world, with Oxford Street at the heart, and I am delighted that our companies are participating in this celebration of its heritage and success."

Gary Reeves, chief operating officer of the New West End Company which is co-ordinating the party, said the party aimed to bring both Londoners and tourists back into the city centre.

"Retail is not going through a good time at the moment nationally and the events in London clearly have created a confidence issue for people coming into London," he said.

The party will take place on the afternoon of Saturday, 1 October, and the street will be closed to traffic from John Princes Street to Portman Street from 1000 BST to 1800 BST.