One of the major financial backers of the Notting Hill Carnival has said it will no longer fund the group which has run the event for more than a decade.
The carnival in 2003 will still happen
The Arts Council has decided to side-step the Notting Hill Carnival Trust, which co-ordinates and promotes the carnival, and give money straight to performers.
It is thought responsibility for this year's carnival will be split between different groups.
The Arts Council distributes money from the government and National Lottery and says it has to make sure public money is well spent.
It says it decided not to fund the trust again because it "failed to meet the conditions of funding".
The Arts Council has also decided to withhold £60,000 of the £140,000 the trust was due to get for last year's event.
There are various people who are taking their own areas of responsibility
Sarah Weir, Arts Council London
But it stressed the 2003 carnival - the 39th to be staged in west London - will go ahead in August and performers will benefit from a 30% increase in funding.
The Greater London Authority has said it will continue to fund stewards at the event.
Sarah Weir, executive director of the Arts Council London said: "There are various people who are taking their own areas of responsibility, the local authority, the Greater London Authority and us funding the carnival arenas, the steel bands and the Calypsonians."
But Chris Mullard, who took over as interim chairman of the trust last year, said a new body had been formed to replace it and would be applying for funding.
He told BBC London: "Carnival is in better shape than it has ever been.
Controversy at carnival
"For the first time in its history we have all five carnival arenas united around the new Notting Hill Carnival Company Ltd. It is the new company that is now busy preparing for carnival 2003.
"We are hopeful when we put our applications in to London Arts this coming week they will give the money to the new accredited body."
This is not the first time Europe's biggest street party has been hit by controversy.
Crime, which peaked with two deaths and several stabbings at the 2000 carnival, and overcrowding have prompted several reviews and suggestions it should move to another venue.
In May, a consultation exercise began on the best way to create a new body specifically for the development of the carnival arts.
It would organise other major London events, as well as the Notting Hill Carnival.