Mayor of London Sadiq Khan said the capital’s New Year’s Eve celebration in Trafalgar Square has been cancelled “in the interests of public safety”.
Some 6,500 people were expected to attend the event in the centre of London before the emergence of the fast-spreading Omicron variant, which has resulted in a spike in Covid-19 infections.
Mr Khan declared a major incident in London on Saturday amid 65,525 new confirmed cases in the past seven days and the impact of the surge on frontline services.
A 29 per cent increase in London hospital admissions had also been recorded in the last week.
Mr Khan has now urged people to stay home and watch the event on television as it will not be visible from the ground or key locations in the capital.
He said: “With infections of Covid-19 at record levels across our city and the UK, I’m determined to work closely with partners in our city to do everything we possibly can to slow the spread of the new variant and ensure our NHS services are not overwhelmed this winter.
“This will be very disappointing for many Londoners, but we must take the right steps to reduce the spread of the virus.”
London's entertainment and hospitality sector has been battered hit by the new surge in cases, with Mr Khan warning of severe job losses if the trend continues.
British producer Sir Cameron Mackintosh has said theatres “desperately need” the government to support the industry as they are in a “dreadful state”.
A string of West End productions and live events have had to cancel performances due to cast and crew testing positive for Covid-19 while bookings for the beginning of 2022 are far below expectations.
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Sir Cameron, whose West End hits include Hamilton and Les Miserables, told BBC News: “This is why we desperately need the government to step in and help the commercial theatre, because by and large the commercial theatre hasn’t had any help at all across the pandemic.
“We’ve all used our reserves to get the shows back up. At the point that we’re trying to recoup some of our losses, we are in a dreadful state at the moment and desperately need the government to help commercial theatre going through the next few weeks.”
The producer and theatre owner added that it would be a “terrible blow” if the sector had to shut again.
“Whether we’re shut by the government or shut by stealth because of all the mixed messages we’ve been getting — whatever happens, the government does need to step in and help the hospitality and the commercial theatres that help keep London going.”
Numerous shows have had to cancel performances, including The Lion King in the West End which has shut until at least December 28 due to “ongoing Covid-enforced absences” among the cast and crew.
Other musicals including The Book Of Mormon, Cabaret at the Kit Kat Club, Dear Evan Hansen and Come From Away have announced they will also all be suspended until December 27.
Jersey Boys, Wicked, Moulin Rouge, Aladdin, Cinderella, Les Miserables, Mamma Mia! and The Drifters Girl have also had issues.