Edinburgh's Christmas and Hogmanay festivals face being dramatically scaled back this year after city council chiefs decided to slash their backing for the events.
New contracts to run the official festivities, which are said to be worth more than £240 million to the economy, propose swingeing cuts to programming budgets.
Insiders say key elements of both events may have to be scaled back or dropped completely as a result of “bewildering” changes enforced in tenders which are been issued to events companies.
The three-day Hogmanay festival faces losing up to 50 per cent of its £1m budget due to a cut in its current subsidy and a demand to foot policing and licensing costs.
This may lead to the capacity of its street party – which was first held in 1993 – being cut from 75,000 and stages being dropped from the event arena, which has been expanded to the Royal Mile in recent years.
Edinburgh’s Christmas festival, which has just reported record visitor numbers to the city centre, has been completely stripped of public funding for the first time since official events were staged in 1999.
Would-be producers may have to pay for the right to create popular rides and attractions in Princes Street Gardens and St Andrew Square.
It is thought the free “Street of Light” event, which has drawn more than half a million people to the Royal Mile and George Street over the last two years, may have to be axed.
The Christmas and Hogmanay festivals have been run for the last four years under a joint £1.3m contract with two firms, Unique Events and Underbelly.
Tender documents reveal the council would now put in just over £800,000, which would be ringfenced for Hogmanay, while a separate Christmas contract would be issued.
A spokeswoman for the city council said: “While the reduced budget means that the format for Hogmanay and Christmas may require some reimagining, the industry is being asked rise to these challenges and deliver a world-class programme for Edinburgh.”
Richard Lewis, the city’s festivals and events champion, said: “Edinburgh’s Christmas and Hogmanay celebrations are world renowned, providing the city and Scotland with unrivalled promotion and a great boost to the economy.
“Over the last three years, the festivals have gone from strength to strength but the costs incurred of policing Hogmanay and pressure on the council’s budget has continued to increase.
"As we take these events to market, our priority now will be to ensure best value for the city while retaining Edinburgh’s position as a fantastic winter destination.
This is an exciting opportunity to build on the huge success of the winter festivals to date and identify new, creative activities and events to refresh and enhance the programme.”
Edinburgh’s festivals may be celebrating their 70th anniversary this year, but the staging of events over Christmas and Hogmanay is a relatively modern phenomenon.
The first Hogmanay festival was instigated in 1993 after the success of an events programme held to coincide with the staging of a European summit in the city the previous year.
In the run-up to the Millennium it was joined by a Christmas event, including an ice rink in Princes Street Gardens.
The cost of paying for the Hogmanay celebrations has been a growing headache ever since the cancellation of the street party in 2003-4, which did not have any insurance cover. A shake-up the following year saw the introduction of a £2.50 administration charge for tickets. The cheapest “early bird” tickets cost £20 for the most recent street party.
Uunderbelly, a leading Fringe promoter, was brought in four years ago to help revitalise the Christmas programme amid complaints the line-up had become too outdated and tacky.
However the festival faced immediate criticism over the increased cost of attractions, which were reduced the following year.
A major new free attraction, Street of Light, was launched in 2015 on the Royal Mile and was relocated to George Street for the most recent festival.