One night in the early 1990s, in a pub in Tamworth, things got a bit loud.

A man living near the West Tamworth Leagues Club, which has been putting on live music in Australia's country music capital for more than 50 years, thought the racket was a bit much and called in the authorities.

The NSW Licensing Court took up the charge, with a magistrate eventually forcing the club install a monitor that automatically cut power to the stage if the band pushed above a certain decibel level.

The device has been there ever since, even as the venue, which has hosted acts such as INXS and Jimmy Barnes over the years, has spent a significant amount of money on sound-proofing.

The club's CEO, Rod Laing, said if they wanted to get rid of it, they would need a court order and the consent of the original complainant.

That would be hard, as we learned at a recent hearing in Tamworth as part of a parliamentary inquiry.

MP Catherine Cusack: "They are still there?" Mr Laing: "No, he is deceased." Ms Cusack: "There is no way for you to do that, even though that person is no longer here? Mr Laing: "We are locked into it. It is there to stay."

Single noise complaint can prove crippling

It's a scenario that illustrates a power imbalance in Australian cities, one that the long-running inquiry has now found is contributing to the crippling of live entertainment in New South Wales.

The committee that conducted that inquiry handed down its recommendations on Thursday. There were few surprises: lock-out laws, poor regulation and a lack of support mean the entertainment economy in the most-populous state in the country is "slowly disintegrating".

One of the starkest elements of that report is the way it shows live music venues — in regional cities but even more significantly in Sydney — have suffered at the hands of, in many cases, a noise complaint from a single nearby resident.

The Harold Park Hotel in Sydney's inner west, more than a century old, was forced to stop its Sunday live music program after a neighbour in a new townhouse development complained. ( ABC News: Siobhan Fogarty )

"It's an Australian cliche to talk about the person who moves in next door to a pub and then complains about the noise," Sydney councillor Darcy Byrne said.

The report lists a number of case studies:

Play Bar, in inner-Sydney, which closed after complaints from an upstairs tenant about noise cost them $100,000 in legal bills, as lockout laws simultaneously cut their trading hours

Play Bar, in inner-Sydney, which closed after complaints from an upstairs tenant about noise cost them $100,000 in legal bills, as lockout laws simultaneously cut their trading hours The Annandale Hotel, a famed Sydney music spot, which moved away from live music for a period following protracted battles with council over noise complaints and late trading

The Annandale Hotel, a famed Sydney music spot, which moved away from live music for a period following protracted battles with council over noise complaints and late trading Sydney's Harold Park Hotel, which temporarily stopped hosting music on Sunday afternoons after a resident at a new townhouse development complained about noise

Everybody knows about lock-out laws — their merits and drawbacks have been an endless source of debate in NSW politics, and the report stopped short of calling for them to be scrapped.

Lesser understood is the "battle for space", as MLC Paul Green called it, and how it shapes the cities we live in.

This is the battle of culture against progress, an attempt to find a middle ground between a live music scene that befits a major world city and the desires of residents in an increasingly crowded and expensive urban environment.

But it's one that, the inquiry found, more often ends badly for the venues — particularly the smaller ones, the engine rooms of the music scene — to the detriment of the cultural landscape.

Complainants 'regulator shop' their concerns

In 2014, Victoria introduced "agent of change" laws, which put the onus for sound-proofing on the new resident or residential developer in the area, rather than any existing businesses.

That came after Melbourne's famous Cherry Bar, in AC/DC Lane, was almost shut down because of noise complaints from a new development on Flinders Street.

Now, the NSW report says the State Government should introduce a mix of agent of change laws and Brisbane's "entertainment precinct" model which, despite limitations, has balanced the scales between venues and developers.

And it goes further, urging the Government to close loopholes that let complainants "regulator shop" their concerns, taking them from police, to the local council, to the State Government until they get what they want.

So, what will the New South Wales Government, which was criticised for dragging its feet on the issue of noise complaints, do about all this?

Create NSW, which advises the Government on cultural policy, did not address specific questions put to it by the ABC, but a spokesperson said it recognised "the social and economic importance of a vibrant, diverse and safe night-time economy".

"This has been an important inquiry and the Government will respond to the comprehensive report's recommendations in due course." it said.

As Mr Green, who led the inquiry, said: "To neglect the music industry any further in New South Wales is at our own peril."