Detectives hired by a women’s rights group found The Windmill’s dancers flouted its “no touching” rules and witnessed “intimate touching and sex acts” at the Soho joint.

The loss of the licence means the Windmill cannot provide “entertainment principally or solely for the purposes of sexual stimulation” but can still sell alcohol.

In documents seen by the Evening Standard, one investigator said: “I was approached by a dark haired female who was wearing a see-through dressing gown, red bra, suspender belt, knickers and high-heeled shoes. She told me her name was Summer.

“I bought her a white wine and a Malibu and coke…she began her dance during which she removed all of her clothing until she was fully naked, as she performed she rubbed herself up and down my groin area.”

The women’s rights group said they are working under a management that could be “prostituting them”.

The Soho Society said it was concerned the dancers at the Windmill “may end up in a working environment where they are even more vulnerable than they are at present”.

Westminster Council leader Nickie Aiken said: “There is a thin line between seedy and bohemian, what was happening at this club – historic though it may be – crossed that line.”

The club’s owner Daniel Owide said: “We have dismissed six dancers, suspended 10 dancers and sent dancers home during the night on 10 occasions.

“Any breach of the ‘no touching rule’ results in immediate dismissal.

“I am now confident the entire team are committed to ensuring our compliance and we will work tirelessly to ensure no future lapses.”

The club was opened in 1931 and survived bombing raids during the Blitz in World War 2.

It introduced nudity to the stage for the first time in the UK the next year.

The Windmill has 21 days to appeal the decision.

Last year, Daily Star Online uncovered racy pics from the World Burlesque Games in London.