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Stirling Stewart, owner of The Rocketeer in North Berwick, applied for a licence to serve alcohol at outside tables over the summer.
However, a meeting of East Lothian Council’s licensing board heard that local objectors had raised concerns about the use of part of Anchor Green – which is home to a Celtic Cross dedicated to a local hero – for drinking and a lack of toilet facilities.
One objector, Helen Mulgray, told the virtual meeting that the town had already witnessed queues at public toilets, with up to 30 women in a queue at one over the weekend.
And she questioned whether The Rocketeer’s toilet would be able to meet demand from additional customers generated by the outside tables.
She said: “There are already signs of human pee at the bins.
“In Portobello, a lake of pee has been reported because of the crowds and North Berwick will have equally as big crowds.”
Ms Mulgray’s sister Morna also objected to the use of Anchor Green, pointing out that local by-laws prohibited drinking alcohol in public spaces and the green remained a public space.
However, the board was told that granting an alcohol licence for the site would overrule any by-law.
Morna Mulgray told the board: “I have sympathy with cafe and restaurant owners who have been hit hard but this is a case of giving an inch and taking a mile.
“Most people think it is disrespectful for alcohol to be consumed in close proximity to a cemetery.”
Anchor Green lies next to the ruins of St Andrew’s Old Kirk and is thought ot be on part of its graveyard.
The Celtic cross which is prominent on the green was put up in memory of Catherine Watson, who died in 1889, aged 19, as she tried to rescue children swept out to sea.
The Green itself is according to legend the site where Francis Stewart, 5th Earl of Bothwell, and his coven attempted to incite a storm to sink a ship carrying King James VI from Norway.
The story incensed James VI so much it sparked the North Berwick Witch Trials – the first major witch hunt in Scotland.
A planning application by The Rocketeer to allow the restaurant to use the green for three years was rejected by East Lothian Council last month.
However, the green was used by the restaurant last summer using Scottish Government guidance which relaxed planning rules in a bid to support hospitality.
The guidance, which is still in place, allows a 28-day rule which lets outside areas be used for 28 days in a year without requiring planning permission to be extended.
It tells local authority planners: “We do not expect the limits of the 28-day rule to be enforced against reasonable temporary outdoor uses, which may include temporary structures, should a longer period be appropriate and helpful to businesses.”
The board agreed to grant The Rocketeer three occasional licences to serve alcohol outdoors covering a period of time from Monday (April 26) to June 6.