Palazzo Versace, one Australia's most luxurious hotels, is facing a potential glass ban after a glassing attack at a staff Christmas party.

Queensland liquor licensing officials have promised to take a "commonsense" approach when they assess the Gold Coast venue, which has been threatened with "high risk" classification over the incident.

Top of its class ... Palazzo Versace offers six-star opulence.

Management of the five-star Palazzo Versace are being been forced to explain why some parts of the swish venue should not switch to plastic cups or tempered glass as part of a controversial State Government plan to tackle alcohol-related violence.

The hotel is one of the nation's most exclusive, with 205 rooms, 72 neighbouring condominiums, three award-winning restaurants and a private marina.