Business chiefs in London have told the government that “the worst-case scenario has become a reality for the arts and culture sector” after the pandemic wiped out activity in the West End.

In a letter to the UK’s culture secretary Oliver Dowden, businesses and organisations in London’s entertainment heartland said the prediction of “cultural ruin is becoming reality with the third lockdown”.

Business leaders warned that “we risk the near-extinction of the arts and culture sector, plus the countless hospitality, leisure, retail and tourism businesses that rely on it, in one of the most culturally rich areas in the world”.

The letter was signed by businesses such as the Ritz and Madame Tussauds, alongside groups such as the Society of London Theatre, Heart of London Business Alliance (Holba) and New West End Company.

Footfall in central London has dropped about 92 per cent compared with the same period last year, with mainly essential workers now supporting the few local businesses able to open under national lockdown rules. Weekly traffic in West End tube stations is as much as 95 per cent lower.

Holba last year commissioned engineering consultancy Arup to assess how the arts and culture sector would fare between now and 2025. Under the worst-case scenario, where London experiences repeated lockdowns, it found that there would be a 97 per cent decrease in economic output, which would amount to a total loss of £18.5bn in gross value added between 2020 and 2024.

This “worst-case scenario” for the arts and culture sector was becoming a reality, according to the letter.

“This is not only putting jobs at risk but is permanently removing a piece of the nation’s cultural heritage and the UK’s soft power abroad,” it stated. “The West End needs immediate support.”

The groups have appealed for an extension of the theatre tax relief scheme and a government-backed insurance scheme for theatre and arts and cultural institutions, similar to that which has been given to film and TV.

The letter stated that this would allow producers of theatre and other shows “the confidence and security to produce work without the fear of Covid infection derailing opening and incurring huge costs”.

They also want an extension of the VAT cut for arts, cultural and hospitality businesses and an extension of business rates relief until at least March 2022.

Holba chief executive Ros Morgan said that the government was guilty of “wilful ignorance” over the problems facing businesses in the area, which often contend with much higher costs in terms of rents, rates and wages but are offered the same level of support as other areas of the country.

Morgan said a “road map out of lockdown” was needed to help the area plan for an eventual reopening. The groups estimate that cultural tourists spend £7.3bn a year in the capital, supporting at least 80,000 jobs.

A government spokesperson said it was supporting London's culture through the £1.6bn Culture Recovery Fund, “which is helping to stabilise organisations and protect jobs across the city . . . once we are confident we are in a position to explore possible reopening dates, we will be working with organisers to unlock the barriers they face to restarting.”