The eisteddfod is an annual celebration of Welsh culture

The future of the National Eisteddfod could be in jeopardy because of serious concern about its finances, says a report by officials.

The eisteddfod's shadow governing body met in Aberystwyth on Saturday and said this year's festival in Newport, south Wales, was already showing signs of losing a large amount of money.

To date, local fund-raising has raised �80,000 towards the �200,000 target.

The sale of pre-festival ticket sales was very slow and the worst case scenario, according to the report, was that it could lead to a loss of �300,000.

Last year's festival at Meifod, Powys, reached a break-even point making a small profit of �1,000.

But due to central fund losses, such as staffing and running costs, there was an overall yearly loss of �130,000.

With a similar shortfall predicted this year the festival reserves were expected to drop to �870 000.

The report said that if the Newport eisteddfod lost money as predicted, it could put the future of the festival in jeopardy.

It was decided to call a special meeting of the council within the next few months if there is no improvement in the situation.

Despite the financial implications, the board has decided to go ahead and hold this year's festival.