Keir Starmer has been urged to abolish an “outdated” rule that limits the power of communities to prevent bookmakers and 24-hour slot machine shops from opening on high streets.

In a letter to the prime minister, nearly 300 politicians and campaigners called for an end to the “aim to permit” policy, introduced when Tony Blair’s Labour government liberalised gambling laws in 2005.

The rule places a legal obligation on licensing authorities such as councils or the Gambling Commission to err on the side of allowing new gambling premises.

“Our high streets are being hollowed out by a surge of betting shops and 24/7 slot-machine venues, while local people are left powerless,” said the Labour MP Dawn Butler, who coordinated the letter.

She said the aim to permit rule had left councils powerless to refuse licence applications, even in the face of local opposition.

Last year the government pledged to give councils more powers to block such applications by allowing them to take into account “cumulative impact assessments” looking at the number of betting and gaming shops already in an area.

The promise followed Guardian reports of 24-hour slot machine shops taking advantage of favourable planning and licensing laws to open at a rapid rate, clustering in the most economically deprived areas.

Signatories of the letter, who include Butler and the Greater Manchester mayor, Andy Burnham, welcomed the commitment to cumulative impact assessments but said the promised measures did not go far enough.

“This call for change is not about banning the occasional bet,” they said. “It is about protecting our high streets, supporting vulnerable residents and ensuring that councils have the tools to act in the interests of their communities.”

They urged Starmer to meet a delegation to discuss abolishing the aim to permit rule, a fundamental tenet underpinning British gambling regulation since 2007, when the Gambling Act came fully into force.

Previously, companies that wanted to open a betting shop or an adult gaming centre – high street shops sometimes known as “slot sheds” – had to show they were serving demand that was not being met.

Butler said she had applied for a 10-minute rule bill, which allows a backbench MP to make their case for new legislation in a short speech that an opponent of the policy can then rebut. Such debates do not result in policy becoming law but are often seen as a gauge of parliament’s likely stance if any such legislation is introduced in future.

The letter was signed by 280 people, including 46 MPs, six members of the House of Lords and 216 councillors, as well as campaigners for regulatory reform of gambling.

The campaigners pointed to figures indicating that more than a million people in Britain suffer from a gambling problem and that up to 20% of the population are directly or indirectly harmed by it, including through stretched public services, financial problems and suicide.

“We believe the government now has an historic opportunity to put people before profit and to deliver a fairer, safer approach to gambling,” they said.

A spokesperson for the Betting & Gaming Council, the industry’s lobby group, said: “Betting shops alone support 46,000 jobs, contribute nearly £1bn a year in direct tax to the Treasury and a further £60m in business rates to local councils.

“Crucially, research by ESA Retail shows that 89% of betting shop customers also visit other local businesses when they go to the bookies, providing a welcome boost to high street trade. However, since 2019 the number of betting shops has fallen by 29% – over 2,300 closures in just five years, with the loss of thousands of jobs, and millions in tax revenue.”

A spokesperson for the Department for Culture, Media and Sport, said: “We’ve already committed to giving councils unprecedented new powers to limit gambling shops on their high streets and will introduce new assessments to go further so that councils have greater say over the location and number of gambling outlets, particularly in areas vulnerable to harmful gambling.

“We are working across government and with councils to halt the decline that people are seeing in their towns and high streets so people feel proud of the area they call home.”