The scheme would see Hooters open on Water Street and become only the second branch in the UK. The other is in Nottingham.
Labour Councillor Maria Toolan launched an online petition opposing the controversial plans, describing Hooters as “an archaic and chauvinistic brand”.
Despite the opposition, plans were given the go ahead - with the bar set to be located in New Zealand House.
But now the scheme has come to a halt after plans to display two illuminated signs, a fixed banner and a new orange and white flag were rejected.
Members of the public described the proposed signs and flags as ‘garish’ and ‘incongruous.’
Councillor Nick Small said: “The proposed signage, banner, flag and canopy and its bright, gaudy orange colours are not within keeping of the character of the Castel Street Conservation Area and would detract from and undermine the unique heritage of the area.”
In a Liverpool Council report they stated reasons for refusal as: “By virtue of size, design and siting, the proposed illuminated vertical signs, banner sign and flag would fail to preserve the character and appearance of the application building and Castle Street Conservation Area and the setting of the adjacent listed buildings.”
The Council are hoping to continue to work ‘proactively’ on the plans with Hooters.
Hooters was granted a license to open back in February.