The Shire of York has cited the federal government going into 'caretaker mode' as the reason one of the town's most-popular tourist events will no longer take place.
In a statement released by the Shire, chief executive Paul Martin advised that the 2019 Yorkids Festival would not be going ahead this year because of delayed funding decisions.
The event, scheduled for the June long weekend, was to be the second time the festival had taken place.
Shire president David Wallace said cancelling the event was seen as the only viable option.
"We are disappointed to not be holding the event this year but it is out of our control with the federal government going into caretaker mode," he said.
"Every possible way forward was looked at to run the event.
"We could have held a smaller version but what has worked for York in the past few years is running high-quality events, which provide a high-quality, meaningful experience when tourists visit York."
Mr Wallace said the Shire of York committed $23,500 towards the Yorkids Festival and was awaiting $34,000 from other agencies.
"We are confident we are getting the funding, but it won't be secured in time," he said.
"This will be carried forward for next year's event."
On the back of the rising popularity of nature style play, last year's Yorkids Festival exceeded expectations.
Mr Wallace said more than 1800 people registered for the nature play event, which had 1200 places on offer
"People had a register beforehand and that got out of control," he said.
"It can only continue to get bigger.
"Less than 10 per cent of those people were locals - that is a critical figure to have."
Mr Wallace said the Shire was confident next year's event would be fully funded and go ahead as planned.