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Licensing minister Gerry Sutcliffe explained more about the new rules: "Going to see a band, musician or singer is a very important part of many people's lives and we're keen to do what we can to support audiences and musicians.
"An exemption for venues with 100 people or less would benefit many small venues, particularly unlicensed premises such as village halls and cafes, which may currently be put off by licensing requirements. But we are also proposing that the exemption can be revoked at individual premises if there have been problems with noise, nuisance or disorder."
Currently anyone wanting to put on live music must have a premises licence, a club premises certificate or a temporary event notice, although there are some exceptions for incidental, background music.
An exemption would ensure that all licensed premises such as pubs and clubs would be able to put on small scale live music, regardless of whether or not their existing licence included a provision for staging entertainment events.
Unlicensed premises such as cafes, restaurants, village halls and record shops would also be able to host events without the need of for a licence.
But to ensure that any concerns of people living close to venues are taken into account, the exemption would only apply to performances that are indoors, and take place between 8am and 11pm.
Residents and responsible authorities such as the police would have the power to call for an exemption to be revoked at a specific venue if there was cause for concern.
Martin Rawlings, director of pub and leisure at the British Beer and Pub Association (BBPA) said: "The BBPA welcomes any measures that can help pubs overcome existing barriers to putting on live music, helping aspiring and established musicians to reach audiences while at the same time boosting business, particularly during these difficult economic times."
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