Edinburgh Festival's Spiegeltent at risk of festival no-show for second year running

Australian impresario David Bates, founder of the Spiegeltent (pictured), has warned promoters and artists he had lined up to find alternative venues, blaming last-minute problems over the hiring of George Square Gardens.

Mr Bates admitted he had been unable to resolve an "eleventh-hour situation" over the Edinburgh University-owned site in time to get into this year's Fringe programme.

Mystery last night surrounded the reason for his move amid claims the handful of residents living on the square had been threatening legal action over the return of the venue after protesting against the growth of the "Spiegelgarden" arena in previous years.

Mr Bates had previously been at loggerheads with residents over the amount of disruption caused by the venue, which boasted the Fringe's largest outdoor drinking area.

He pulled out of last year's festival claiming essential repair work was needed on the Belgian mirrored tent, which dates back to the 1920s. His latest move has left performers scrambling to find alternative venues.

Rival promoter Underbelly took over the use of the gardens last year, but it is thought unlikely another promoter will be able to step in and take on the site in time to meet the programme deadline.

Mr Bates, a fixture on the Fringe since 1996, insists he has not given up hoping of coming to the Fringe this year, but the venue may not be financially viable without enough money-spinning acts.

A spokesman for the university said: "Due to circumstances beyond the control of Spiegeltent International and the University of Edinburgh, the Spiegelgarden 2010 project cannot currently be guaranteed to be confirmed before the Fringe programme deadline of 21 April. Both parties are actively working towards a quickest possible solution."

In an e-mail to Fringe contacts, Mr Bates said: "Although there is optimism the project will proceed, I have been advised not to confirm any programme at all right now. In the circumstances, I can only recommend that you seek an alternative venue.

"This sudden disruption to our plans for the site and programming is particularly disappointing as we have been working hard on an innovative re-invention of the project and were very excited about our return."

Steve Cardownie, festivals and events champion at the city council, said: "It would undoubtedly be a loss to the Fringe if it wasn't here this year and I hope there can be a resolution of the current issues."

Scottish promoter Loudon Temple, who represents Spiegeltent favourites like The Wilders and The Hot Seats, said: "I cannot understand why any issues over the site could not have been resolved before now."