Traders fear visitors could be driven away from the Fish Quay if proposed traffic proposals are given the go-ahead.
North Tyneside has drawn up plans for the area – in particular around Bell Street and Union Quay – following complaints by members of the public about traffic problems.
But business owners say the plans could scare away visitors, putting their businesses at risk.
Concerns have been raised that the plans could see the loss of 30 parking spaces while a new time limit of an hour in some areas and no parking sections would not be enticing to visitors.
Traders have set up a petition objecting to the plans, which has been signed by more than 3,000 people in less than a week.
Martin Ponton, of grocers WM Wights, said: “Instead of creating more spaces, the council is proposing to take away at least 30 spaces.
“Most businesses on the Fish Quay rely on motorists, it’s the only way to get here.
“We feel the proposals are unfair.
“The only time we have problems with parking is at a lunchtime when people double park as they pop into a shop or a fish and chip shop.
“That could easily be resolved by a traffic warden keeping cars moving on, but we never see any down here.
“If everyone parks properly then the traffic will flow properly.”
Letters have been sent out by the council to all businesses on the Quay outlining the plans as part of a consultation exercise.
Two parking studies have been carried out – in 2011 and 2012 – as the authority looked to find a solution to the problem and identify the ongoing issues.
The reports – which also looked at opportunities for more spaces – said that congestion was caused by double parking and cars manoeuvring in and out of spaces, while parked cars were also creating a visual impact.
Mr Ponton added: “There were plans for a 70-space car park on West Quay but they never materialised.
“Shoppers are signing our petition, they agree its ridiculous that they are taking away spaces.
“It’s great down on the Fish Quay now.
“Businesses welcome all the investment by North Tyneside Council and the Port of Tyne. It has improved the area greatly.
“The Quay still has a small fishing industry but 95 per cent of the visitors come here to eat. They need somewhere to park.”
A council spokesperson said: “In response to repeated complaints from the public about obstructive parking along Bell Street and Union Quay, we have developed some proposals that seek to improve the current parking situation and traffic flows.
“We are currently consulting with residents and businesses about these plans – no decisions have been made.”