I am a copyright lawyer, but this is not solicitor-client advice (for that, there are fees, and what our law society calls a "client care" letter (translation, contractual terms of business)).

THere are two issues. THe first is that of a public perfomance licence, and the law is correctly set out on the Dudley webiste at the link given above.

THe second is the PRS - the performing right in the music, administered by the performing right society. perfomring the music in public is an act restricted by copyright, and don't bother trying to be clever about "public". THe premises need a PRS licence, because most stuff done in folk clubs is NOT public domain. THey probably have one to cover the juke box anyway, but check.

If in doubt, get someone else from a different area to teplephone the PRS and tell them they are thinking of starting a folk club and ask for advice.

If still in doubt get a member of the musicians' union to ring the MU and say he's been offered a gig at a folk club and ask whether he has a PRS problem if he does a cover of another composer's music.