A Tower Hamlets strip club has lost its licence after undercover investigators accused naked dancers of breaching strict no touching rules.

Whites Gentlemen's Club near Aldgate had its sexual entertainment licence renewal refused on Tuesday night after councillors heard performers rubbed themselves against investigators in £850-a-visit VIP rooms.

One investigator said that during a private dance a performer "began to grind her rear against me" and on two occasions touched him intimately with her teeth through his clothing.

He said the woman then "insisted" he buy a VIP room package, where a dancer offered him a drink from an open bottle, which he did not want "due to the risk".

"The female began to dance, whilst fully naked, up and down against my whole body, focusing particular attention to my groin area," he said. "She subsequently began to unbutton my shirt and stopped as I moved position."

He added that after the dance he was asked if he would like to "take things further" in another VIP room. "She vaguely informed me that I could get more from her, with more privacy," he said. "I declined this offer."

Under licensing rules, dancers are not allowed to intentionally touch customers during performances or solicit payment for sexual favours.

Investigators, who visited in May, said they were briefed on the code of conduct by door staff.

But CCTV footage from the club showed other customers touching a dancer's bottom and thighs and performers straddling men, Tom Lewis from the licensing and safety team said.

"The standard conditions relating to the prevention of touching between performer and customer are there for the safety of the performer so that customers are not led to believe they can touch the performer whilst having a private dance," he said.

"Thus where a premises fails to adequately prevent this and properly enforce the house rules and conditions of their licence puts the performers in a greater degree of risk from unwanted physical contact of a potential sexual nature."

He added: "The operatives were instructed not to encourage or invite touching and so I would be very concerned about what occurs in this premises with customers who would encourage touching."

The licensing committee refused to renew the club's sexual entertainment licence.

Club bosses have 21 days to appeal the decision.