Organisers of The Enchanted Forest the month-long Perthshire event which has sold more than 80,000 tickets in recent years, said they could not take the financial risk of pressing ahead with their plans.
They say they ran out of time waiting for clear Scottish Government guidelines on how the month-long event, which is normally worth £7.6 million to the economy, could be staged in the autumn.
Under Scotland’s current route map, events and entertainment will be allowed to resume on 17 May. Flagship events for more than 5000 spectators can be approved the Scottish Government.
However new guidelines published last week suggest all indoor and outdoor events planned for later this year must enforce two metre social distancing.
A review of these guidelines is expected to be carried out over the next few weeks following a blacklash from event organisers.
Some light shows were able to go ahead in Scotland last year, including Christmas at the Bonatics and Wondrous Woods in Edinburgh, despite restrictions on live entertainment.
However the 2020 edition of The Enchanted Forest, which has previously been named Scotland’s best cultural event and the country’s best outdoor festival, was cancelled last May.
The Enchanted Forest, which was due to celebrate its 20th anniversary this year, normally sees audiences bused from Pitlochry to nearby Faskally Wood.
An official announcement said: “It is with heavy hearts and great sadness that we have reached a decision to cancel The Enchanted Forest in 2021.
“Like a great many events, we had sincerely hoped that we’d be able to operate this year. We have planned with that in our hearts, while waiting patiently on the necessary guidance and clarity that would enable us to proceed safely.
“That clarity and guidance has, sadly, not been forthcoming in sufficient time for us and, regrettably, the financial risk of proceeding with our plans and potentially having to cancel at a later date without insurance to underpin potential losses is too considerable for a small charitable event operator to bear.
“This year’s event was intended to mark our 20th anniversary and, while we may not be able to come together in the forest as planned, we’ll be looking to mark the occasion in a way that celebrates the incredible magic and success of 20 years of The Enchanted Forest.
"Our beautiful home of Faskally Wood has stood proud and tall throughout this pandemic, and we hope our customers have kept safe and well.
"We’re confident that we will be able to return one day, and we look forward to when that will happen.”
Other major Scottish events called off recently include the Royal Highland Show in Edinburgh and the World Pipe Band Championships in Glasgow.
Edinburgh’s summer festivals are still planning to go ahead in some form, while Glasgow’s TRNSMT festival has been pushed back from July to September in the hope that social distancing restrictions will be lifted.
Distancing restrictions are due to be lifted by the end of next month in England, where several test events have been carried out without the need for audiences to wear face masks or socially distance in recent years.