Fringe Sunday, the largest event at the Edinburgh Festival Fringe is facing cancellation in 2009 due to funding problems.
Despite attracting over 250,000 in 2008, the free event looks set to be axed due to the lack of income.
The event, which costs around £70,000 to host, has been without a main sponsor since the Bank of Scotland’s deal ended in 2006.
The move comes amid speculation in the press that the Edinburgh Fringe festival will require a £600,000 bail out in 2009.
Despite attempts to strike a new deal, the bleak economic climate has raised the likelihood that, barring a last minute deal, the event will be pulled.
A Fringe spokesperson confirmed that the future of the event would be decided soon: “A review of all Fringe events and activities, including Fringe Sunday, is currently taking place and a final decision has yet to be made on the staging of the event.
“We are assessing the costs and likely income produced by the event before making that decision.
"The most recent cost of the event has been in the region of £70,000, which represents an increase of 16 per cent on 2007, due to rising transport costs, hire of marquees and other equipment.”
Fringe Sunday was first held in 1981, and has had to move location twice to accommodate high demand. It was originally staged on the High Street, but soon moved to Holyrood Park before switching to the Meadows.
Over 150 acts took part in last year’s event, the most successful to date in terms of attendance.
One former Fringe Society executive told The Scotsman that any decision to scrap the event would be a loss for the local population.
“The whole idea of Fringe Sunday was a party thrown by the Fringe for the people of the city as a thank-you for putting up with the Fringe," he said.
"For that very reason it would be a great tragedy if it goes and, to be honest, you would have thought the Fringe would want all the friends it could get."
He also expressed concern that the Fringe could lose some status if the event is axed. "It's also important for the Fringe because all the other festivals have some big set-piece event: the fireworks for the International Festival, Jazz on a Summer’s Day for the Jazz Festival, the street party for Hogmanay.
"It would be a great shame if the most open of all the festivals couldn't throw a big event.
"It does a great job for the performers, showcasing their acts, it does a job for the Fringe in giving something back to the city, and for the public it gives them a taster of the Fringe, when many of them won't go to anything else in the festival.”
The problem of funding the event is only one of a number of financial difficulties faced by the Fringe in the past eight months.
The newly-introduced online ticketing system crashed within hours of opening in June, and many shows have claimed that box office glitches were responsible for a 10 per cent decline in ticket sales.
A £250,000 rescue package was recently announced, but reports have indicated that this will need to rise to up to £500,000 in the next few months if further crises are to be averted.