Nearly 1,000 more revellers could spill into central Kingston late at night after councillors approved big changes to the licence of Pryzm nightclub.

Owners applied to create a second, separate venue in the same building in Clarence Street, as well as increase the capacity of Pryzm itself by 150 people.

Plans include holding live music events (to replace those at the recently closed Hippodrome) and spending £2 million on renovations, including the creation of the new 770-capacity cocktail bar.

The new venue, Bar and Beyond, will be a “Shoreditch-inspired” bar described as “instagrammable at its finest”, serving cocktails, craft beer and street food, with staff wearing tweed and with an “eclectic” playlist “from Dolly Parton to Kings of Leon”.

Pryzm owners Deltic Group Ltd said the increase in capacity should be viewed in the context of half of pubs, bars and clubs in Kingston having closed in the last ten years, and the 2,500-capacity Hippodrome having shut over the summer to be developed into flats and shops.

They have promised a series of new measures to deal with the large crowds around the two venues, including a new queue system for Pryzm, a different patrol route for security staff in nearby roads and a supervised “Uber waiting area” for people getting minicabs.

The main points of contention were regarding timings.

Deltic Group Ltd made one concession at the Licensing Sub-Committee meeting on October 23, which came after a year of conversations with the Metropolitan Police, Public Health and the council: both Bar and Beyond and Pryzm will have last entries at 1.30am, after police argued against the proposal of 2am.

Pryzm will stop serving alcohol at 3am, and Bar and Beyond will stop serving at 2am in an attempt to stagger the number of people outside the venues at closing time.

James Rankin, a barrister presenting the Met’s arguments, said this was to prevent a repeat of the “ultimate nightmare” of October 2012, when 20-year-old Jamie Sanderson was stabbed to death at the nightclub, which was called Oceana at the time.

He said: “It’s not a question of numbers, it’s a question of what people do.”

He pointed to the rise in violent crime at night in central Kingston, and added: “Police are struggling to keep a lid on the town centre, and that’s with the backdrop of other local venues closing.”