Businesses will close as a result of Dublin city council's rent review policy, the chief executive of ISME has claimed.

Mark Fielding accused the council of creating hardship for businesses by enforcing upward-only rent clauses for commercial property, despite falling rents in the private sector.

"The council will succeed in closing down businesses if they continue doing this," said Fielding. "All they see is that they are getting a rent and they are getting it come hell or high water."

Fielding said he was aware of situations where the council was insisting on an upward-only rent review. "They are aware that the money is being pulled back by central government and they are scrambling for every penny they can," he said.

Dublin city council (DCC) has substantial holdings across the city. Income from its commercial properties jumped from €5.5m in 2008 to €7m last year. However, the take for this year is significantly down, with just €4.5m collected to date.

A DCC spokeswoman said the council takes a flexible approach to rent negotiations. "The council engages fully with all its tenants/lessees who are experiencing difficulty with their rent and takes a pragmatic approach based on issues such as previous payment record, level of rent, viability of the tenancy and evidence of current financial trading levels," she said.

Dublin Chamber of Commerce also called on the council to be more reasonable. "In 2007/08, rents had increased by 60% over three years," said policy manager Patrick King. "Most landlords have taken a pragmatic approach to ensure that business keeps going. From this period, the rents have dropped by nearly 50%," he said.