Leicester's Summer Sundae Festival has been called off next year due to dwindling ticket sales.
De Montfort Hall bosses yesterday said the festival was "taking a break" rather than being axed, and vowed to do everything possible to bring it back in 2014.
However, De Montfort Hall general manager Antony Flint confirmed the event had been losing money and said changes would have to be made to make it financially viable.
The festival, which attracts thousands of music fans each year, has brought dozens of big-name acts to the city since it started in 2001, including Amy Winehouse, Elbow, Mumford & Sons, Billy Bragg and McFly.
Sell-out crowds of about 18,000 turned out in 2010 – but numbers fell to just 10,000 this year.
Mr Flint, who took over as manager of the hall in July, said calling Summer Sundae off had been a difficult decision to make.
"It's no secret last summer was disappointing in terms of visitor numbers – they have dropped by almost half in two years.
"We were looking at a number of options but came to the conclusion that taking a year out was probably the best solution, in order to give us a bit more time to plan things properly."
Mr Flint said this year had been difficult for independent festivals due to the Olympics, recession and bad weather.
"There are hundreds of festivals now," he said. "When Summer Sundae started, there wasn't as many.
"That's had a big effect on the availability of artists, and people have more choice." When asked how Summer Sundae could be brought back successfully in 2014, Mr Flint said: "That's the million dollar question.
"We've got to think about what the festival is and what it's going to be, and that's going to take a bit of time.
"I can guarantee we will do everything in our power to put something together that makes the festival sustainable and brings it back in 2014."
Summer Sundae received a £60,000 subsidy from the city council in 2011, and £80,000 this year.
Mr Flint said the festival was losing money. Promoters Concert Clinic, which run the event, have not released the latest figures.
Concert Clinic director Rob Challice was not available for comment yesterday. In a statement, he said: "There's no denying last year was a difficult year for independent festivals. This wasn't an easy decision for us but we think it's the right time to take a year off."
Leicester musicians who have played at the festival were shocked by the news.
Jon Read, who plays trumpet for The Specials and is in Leicester band Kingsize, said: "I know they had slow ticket sales this year but I think it's one of those festivals that's worth keeping."
Leicester singer-songwriter Jersey Budd also played at the festival this year. "It's a shame," he said. "There's been some top acts on over the years and I've got great memories.
"This year, the atmosphere was great. It's the biggest thing in the summer, everyone looks forward to it."
The news came as De Montfort Hall announced a programme of outdoor events over three weekends in July, to celebrate its 100th anniversary next year.
Announcements about the events are set to be made in the coming weeks.
