THE Labor Party pub in South Australia that hosted strippers and welcomed bikies has closed and may be sold.

The Colac Hotel in Port Adelaide. The Advertiser

ALP state secretary Kyam Maher said the party terminated the lease of the Colac Hotel in Port Adelaide because tenant Goldedge Holdings had failed to pay rent and had not responded to formal notices for payment. He said the pub would remain closed until the party decided what it would do with it.

"We just don't know what we will do, we will need to get some advice on what all the options are," he said.

Mr Maher confirmed the party was considering selling the property but would consider all options under a review that was expected to take "a few months".

The legal matters surrounding the eviction are being handled by Griffins Lawyers, now headed by former ALP state secretary Michael Brown, who is also a former director of the company that owns the pub.

The ALP bought the pub in the 1970s as a way of securing future income.

Financial returns lodged with the Australian Electoral Commission show the party received $339,961 in rent from the pub between 2005/06 and 2009/10 - although it is expected to have benefited by at least another $80,000 in 2007/08, when no financial return was lodged.

Josip Plesa, the sole director of the evicted tenant, could not be contacted last week and inquiries made of the company's registered office at Goodwood were told Mr Plesa was not known at that address.

Mr Plesa is reported as welcoming hundreds of bikies protesting against anti-association laws with a sausage sizzle in 2009, dismissing any concerns his landlord may have had with his "business opportunity".

The Colac Hotel caused more discomfort for Labor that year when $62,000 was transferred from the hotel to reimburse former federal MP Rod Sawford for costs relating to a defamation case concerning the sale of the Cheltenham Racecourse - branded "an improper purpose" by Labor's State Executive.

The payment sparked the transfer of ownership of the hotel from the party's local branch to the State Executive.

Former state secretary Michael Brown did not end the strip nights once the transfer had been made, saying management of the hotel was the responsibility of the tenant.