Both Punch and Judy could hit the deck this summer

Up to 6,000 visitors were expected at the fourth puppet festival this August attracting acts from around Europe.

But the Arts Council of Wales refused an application for up to �3,000, saying the event did not meet their "strategic priorities".

Now the organisers say the fiesta will only go ahead in a reduced form.

Jim Griffiths, clerk at Aberystwyth Town Council, one of the festival's main sponsors, said the news coming so late in the day was "disappointing."

The festival was due to have taken place over 20,21 and 22 August and the organisers were looking forward to basking in the success in Welsh tourism awards in 2003,

We really felt we had met all the criteria that the Arts Council laid down and we were expecting to get something Jim Griffiths

Then they were runners-up in the community category of the Wales Tourism Board's National Tourism Awards.

But now it looks as though the puppet festival may have hit the deck.

"I am not going to say that the festival definitely won't go ahead but it certainly won't happen in the same form unless we can get more sponsorship," said Mr Griffiths.

"We really felt we had met all the criteria that the arts council laid down and we were expecting to get something".

Street theatre, musicians and hundreds of Punch and Judys from Wales, UK and Europe were due to turn up at the festival. which provides a major boost for the local economy.

'Best of luck'

"We will now have to go cap in hand to the business sector to see if anyone can help us out with a small grant to ensure that the festival goes ahead.

The organisers are around �2,500 short of their �12,000 target for funding.

"Sponsorship is getting harder to find as a lot of companies are running on ever tightening budgets.

In a statement the Arts Council of Wales said all applications to its small grants scheme were carefully considered against the body's scheme priorities.

"The Arts Council of Wales receives a great number of applications for this very popular scheme far in excess of the funds available.

"Unfortunately, on this occasion, Aberystwyth Town Council's application did not meet ACW's strategic priorities," the statement read.

"We are sorry that the applicants are disappointed that they did not receive the funding that they had hoped for and we would like to wish them the best of luck for the future."