Traders on Bristol's Gloucester Road are threatening to withhold their business rates if plans for Residents' Parking Zones (RPZ) continue.
They are warning the costs the permit system will put on businesses will be substantial and further consultation needs to be done.
Mayor George Ferguson wants to roll out 18 RPZ by the end of 2014, which he says will help ease congestion.
Mr Ferguson said the dozen traders making the threats were "ill advised".
"They're not considering, they're not listening to me. I am willing to adapt," he said.
"I care, more than anybody does, about small and independent traders in this city.
"I have a record of doing so and they know that. If they don't work with me then they are very, very ill-advised."
Tom Murray, who runs a butchers shop on the road, said the introduction of the RPZs could lead to people losing their jobs.
"If it was legally feasible to [withhold rates], myself and others that are talking about it at the moment are quite prepared to do it," he said.
"If the council won't listen to us, maybe someone from the government will listen to us.
"We've had a hit where the banks didn't support local businesses for many years, and then we get conditions of RPZ that's going to seriously affect small businesses."
Mr Ferguson said he is now considering several concessions to the plans that could help traders.
One possibility was to bring in cheaper parking permits for smaller businesses, and another was to introduce a citywide traders permit to help those who drive around Bristol as part of their job.
He insisted RPZs could prove beneficial to businesses, by freeing up parking once taken by commuters outside their shops.
Mr Ferguson said the idea of withholding business rates can only be counter-productive. He insisted he is happy to engage with traders on the draft plans at this stage.