For passengers arriving at Manchester Piccadilly, the crumbling redbrick arches across the road – the remains of Mayfield station – provide a glimpse of the city’s past. British Rail closed Mayfield to the travelling public before the demise of the steam train, abandoning it altogether in 1986. Since then it has awaited demolition, the site of grand projects yet to be realised.

Now a bitter battle is being fought over the future of the Victorian terminus and parcel depot, which developers want to turn into “the biggest” nightclub in the world. With a capacity of 7,500, Mayfield will dwarf any venue on these shores. There are clubs that can hold more people in Ibiza, but they make use of outdoor space. The Mayfield would house its partygoers under one sweaty roof. Developers and opponents of the 120,000sq ft space have hired teams of lawyers to argue over the fate of the venue – which would also house an arts space and conference centre – which is before the city council’s licensing committee. It is the first stage of what promises to be a long and expensive battle.

Manchester’s Warehouse Project, which already occupies a 5,000-capacity building outside the city, is waiting in the wings. Among those opposing it is the Project’s present landlord, along with representatives of two student housing companies which will have 1,400 tenants living next door. At the final day of the licensing hearing at Manchester Town Hall today, Philip Kolvin QC, representing Adam Geoffrey Management, and the Unite and Liberty housing companies, described Mayfield as “a decrepit and entirely unsuitable shell”. He criticised plans for the site, and said the developers had failed to draw up policies outlining how they would deal with drugs, alcohol or crime linked to the site. He said that were the operators to introduce a regime to frisk all 7,500 clubbers, it would be “something akin to Heathrow. How many guards or sniffer dogs will they need?”.

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“I am hoping that one of the consequences is not death,” he warned. “If this were the germ of an idea for a pizzeria you might get away with it. But to have a germ of an idea for a nightclub of global proportions, you should be seriously concerned.”

Critics say Mayfield will be a huge money-making operation for a company which already has links to some of the most powerful figures in the city’s entertainment industry. Jon Drape, one of the three men behind the bid, is managing director of the Ground Control Group and a director of Ear to the Ground, companies that host events such as the Parklife festival and provide event production for the Warehouse Project, working on behalf of top brands including Bentley, Samsung and the BBC. With tickets for the megaclub expected to cost about £30, a capacity crowd would generate door revenues alone in excess of £5.5m over the 25 nights each year it hopes to be licensed.

Ben Williams, representing another of those opposed to the plan, said the “sheer vastness” of the project put it at odds with public safety. “There is a real risk of this crush effect of those going in and coming out, bearing in mind that many will be under the influence of alcohol. It is simply too big,” he said.

Mr Williams said there was also a “real” risk of contamination from potentially toxic substances within the structure which could “seep through” to clubbers on the ground floor. “Does that not risk harming them?” he asked.

Mr Williams said that at 3.30am when revellers emerged, there would be no public transport available.

For its part, the Mayfield Depot Management Company Ltd (MDMCL), which has hatched the scheme, claims it will create a landmark cultural space akin to the Old Truman Brewery in east London.

The old parcel depot was reborn as a cultural destination earlier this summer during the Manchester International Festival, when it hosted one of the centrepiece events, Massive Attack vs Adam Curtis. There is no suggestion that any of nights were unsafe.

Police initially contested the plan, pointing out that the area had the highest night-time crime rate in Greater Manchester. The vice chancellor of Manchester Metropolitan University pointed out that a student drowned after leaving the Warehouse Project on New Year’s Eve, and the club suffered a drug-related death in September. The fire service is concerned about escape routes and poor lighting. Network Rail warned that it will have no staff on hand to cope with thousands of clubbers at 3am.

An MDMCL spokeswoman said it was working with a number of partners but had not made a deal with the Warehouse Project. She said any safety concerns over the building would be addressed in a planning application. “The police will look at each event as it arises and maintain the power of veto. These will be the strictest licensing terms ever imposed,” she said. The committee has five days to decide whether to grant a licence.