The memorial gardens for the thousands of merchant seamen who died in two world wars and the Falklands conflict are to become the venue for City bankers' Christmas parties.

Event organisers are planning to erect a giant marquee on the lawn around the monuments in London's Tower Hill and festoon the park's trees with Christmas lights. The move has infuriated Trinity House, the organisation dedicated to mariners, and Labour MPs, but Tower Hamlets council has rejected all complaints. Council officers said protests that it should not allow parties among the memorials to 35,000 men lost at sea were not "valid representations" under the terms of the Licensing Act 2003.

The council owns the land, and will be able to charge the party organisers for its use. Moving Venue, a firm that specialises in arranging banquets in "unique and prestigious" locations around the capital, says that it wants to hold parties from 22 November to 17 December. It plans to sell alcohol from 11am until after midnight. It also wants a licence for live music. The firm also hopes to use the park during the 2012 Olympics.

The parties and banquets will take place in Trinity Square Gardens. On one side stands a pavilion by Sir Edwin Lutyens dedicated to the men who died in the first world war. Architects designed a sunken garden to fit behind it after 1945, to record the names of the merchant seamen who died in the Atlantic and Arctic convoys of the second world war. On the other side of the grass is a memorial to the sailors who were killed in the Falklands.

Richard Beggs, of Moving Venue, told the Observer that the dinners would not disturb the dignity of the gardens. He claimed that Trinity House approved of the plans but Graham Hockley, secretary to the Corporation of Trinity House, said the mariners were appalled.

In a statement of its objections Trinity House said converting the park into "a site of entertainment would impact on the dignity of the memorials and the respect due those that are remembered there".

Jim Fitzpatrick, the Labour MP for Poplar and Limehouse, which covers Tower Hill, said that however badly a council needed money it should not allow the "cheapening" of a national memorial.

He said: "Any company sensitive about its commercial reputation would not touch this scheme. This is a totally inappropriate place for people to get drunk and party in. If the company cannot see sense, then the council should withdraw permission to proceed at once."