Wellington's biennial street party, the Cuba Street Carnival, has been cancelled because of a funding dispute between organisers and Wellington City Council.
It costs almost $2.5 million to stage the mardi gras-style event, which features live music and street events.
Organisers are calling for a $500,000 investment from the council for the 2011 event, more than double previous contributions.
Organiser Chris Morley-Hall says he was told that the council would provide funding to the event if it was held during the Rugby World Cup, a claim that has been denied by the council.
Last year the event celebrated a decade of entertainment, attracting a record 150,000 people.
Mayor Kerry Prendergast says she is surprised by the cancellation as the council is still waiting for a formal request for the funding.
Ms Prendergast says the council has been in talks about creating an umbrella organisation to run both the Cuba Street Carnival and the Fringe Festival.
But she says the council has not decided not to commit funding.