The Liverpool Lantern Company was set up in 2003
A Halloween parade, which attracted 10,000 visitors last year, has been cancelled because of lack of money.
The annual event, which sees hundreds of spooky puppets made out of lanterns floating through Liverpool's Sefton Park, will not go ahead as planned.
The organisers, Liverpool Lantern Company, said they had only received a third of the funding required to run it this year.
The council said they were hoping to get funding for the company next year.
A Liverpool Lantern spokeswoman said: "We can't run it this year because of lack of funds, simple as that really.
"We have organised a smaller event to take place at St Lukes Church in Leece Street, which will accommodate about 1,000.
"We are having to charge people, but it is the only way we can ensure it is a success."
The Liverpool Lantern Company was set up in 2003, and works with community groups across Merseyside.
In previous years, it has received extra top-up funds from the Culture Company, but that no longer exists.
A council spokesman said: "We have liaised with Liverpool Lantern Company over this issue and we are now seeking avenues in which to support them in delivering the festival in Sefton Park next year."
It also puts on events at venues across the north, with Manchester and Middlesbrough being the next place to host events.
The children's Halloween Fair will be held on 31 October, at St Luke's Church, known as the bombed out church.