At a Liverpool council planning meeting yesterday, the committee deferred its decision on the flats application until after a site visit had been carried out.
An agent for Hit and Run presented the plans for the new building and told the committee that the current building was in disrepair and that much of it was not in use.
Jed Doyle, who owns Plastic Designs, based in Parr Street, said: "That was an insult. If they had bothered to come in, they would see everything that goes on here."
Dave Hughes, a composer who runs ESP multi-media, and has composed soundtracks to Lock Stock and Two Smoking Barrels, Snatch and BBC series Funland, said: "It is like a family here. If I am working on a project, I might get Jed to do the design or the singing school for the vocals.
"If the building closed, we could all go elsewhere, but I doubt any of us would remain in the city centre and there would not be the same relationship between services.
"That would be the biggest shame, because this is the only place you can get all that outside London."
Ian Gordon - known as Peasy - of Porcupine, a company which manages Echo and the Bunnymen, said the businesses at Parr Street need a Liverpool official to support them.
He likened the loss of Parr Street Studios to the loss of the original Cavern Club and music venue The Picket.
He said: "This would be on a par with filling in the old Cavern Club. Now it is embarrassing and everybody recognises what a bonus it would be to have the original Cavern Club. The studios are another piece of Liverpool's cultural history, it is a wonderful thing to have in the city, we need someone to stand up and fight for it."
The executive member for culture, Cllr Warren Bradley, said if the worst comes to the wors, he will work with the Liverpool Culture Company to find the businesses an alternative base.
He added: "The thought of turning that building into flats just makes me cringe. We need to keep the studios, not just for Capital of Culture but for all Liverpool's budding musicians and artists who want to break into the circuit.
"We cannot lose Parr Street Studios to property developers who are trying to make a quick buck out of the city."
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