Hikes in the cost of performance licences will be "potentially damaging" for the Edinburgh Fringe festival, venue managers have warned.
Mr Gudgin said the issue was causing 'concern and disbelief'
They have written an open letter to Edinburgh City Council to protest at the planned increases, which will be phased in over the next few years.
In the letter Fringe director Paul Gudgin expressed his "deep concern" and urged councillors to reconsider.
Sixty-one Fringe venue managers have added their support to the letter.
Under the plans, small venues of fewer than 200 seats will see a rise in the temporary performance licence from its 2005 cost of £127 to £440 this year.
Next year it will increase once again to £620, while from 2008 a further rise to £800 will be imposed.
Larger venues of more than 1,000 seats will pay £1,320 for 2006 compared with £295 last year.
The venue directors who have signed the letter include Karen Koren, director of the Gilded Balloon, and Charlie Wood and Tom Page, of the Underbelly.
In the letter, Mr Gudgin said he estimated that Fringe Venues collectively pay about £43,000 in licence fees under the current system.
With the proposed increases, that would rise to £221,000 in four years' time, he added.
"There is no way that a rise of this magnitude can be sustained without casualties," Mr Gudgin said.
The council has defended the proposed rise.
They have said new laws mean the costs of its licensing scheme had to be recovered from venues.
Councillor Jack O'Donnell, convener of the licensing regulatory committee, said the scheme had been operating at a deficit of £177,000.
A recent Edinburgh City Council study concluded the Fringe - which begins on 6 August this year - brings more than £75m to the local economy each year.