The owners of properties around St Andrew Square, including finance giants RBS and Standard Life, have rejected pleas for a last-minute rethink.
The operators of the Famous Spiegeltent have been forced to abandon plans to come to the festival this summer after being ousted from the space after three years.
The Stand Comedy Club, which was due to enter the final year of a contract with business group Essential Edinburgh to use the garden, said it had been forced to shelve all plans to create an outdoor space in the city centre in the wake of the snub.
It emerged last month that the St Andrew Square owners had demanded a clampdown on the use of the square for major events due to concerns about the damage that was being done to the green space. The owners were said to want to return the garden to a “space for relaxation” during the Fringe.
The garden, which dates back to 1770, was opened in 2008 following a £2.6 million makeover funded by the city council and Esssential Edinburgh.
It is leased to the authority by the owners and managed by Essential Edinburgh, which had been urged to broker a solution to allow Fringe shows to go ahead this summer.
However a statement issued on The Stand website said: “Unfortunately we have been unsuccessful in securing the final year of our agreement to run our much-loved cultural offering this summer.
“We will miss all of our friends, in particular the Famous Spiegeltent and the staff and suppliers we helped to employ and provide custom to.”
Kenny O’Brien, director of promoters Salt ’n’ Sauce, who run The Stand, added: “I’m done fighting it for this year – there’s no time left to waste shouting at shadows.”
A spokesman for the Famous Spiegeltent, one of the most popular venues, said: “We hugely appreciate the massive support and efforts to get us back in the gardens this year, but sadly it’s not going to happen in 2017.
“If you’re in Edinburgh, please continue to support our lovely partners, and we hope to see you all in 2018. We will miss you.”
Roddy Smith, chief executive of Essential Edinburgh, said: The position over St Andrew Square is clear. No major infrastructure is allow in the garden and any activity in there will be low key.
“The owners are keen to animate the garden throughout the year, but with appropriate activity. If it is to be used for any limited activity during August we will announce it in due course.”
A spokesman for the city council said: : “Our officers have worked hard to find suitable alternatives following the decision to change the use of St Andrew Square.
“Unfortunately no agreement has been reached yet, however we are continuing to work with promoters on a range of outdoor activities during this important 70th anniversary year for the city’s festivals.”