Outdoor art exhibitions, live music events, charity fundraisers and gala days are expected to be hardest hit by the proposals, amid confusion over how the rules should be interpreted.
Councillors in the capital voted to enforce the rules on condition small events were exempted, despite the Scottish Government insisting that it did not want arts affected.
Organisers of free events held from 1 April, after new legislation comes into force, and 20 April, when councillors will debate proposed exemptions, will be effectively breaking the law in the city.
However, the council has signalled that it will only be strictly enforcing the rules on organisers of “large-scale” events in previously unlicensed venues.
Officials insist they do not want to damage small-scale arts events, but should still be able to bring larger events under control. They told campaigners that small-scale events would not come under their “attention or focus”.