The festival is staged by Queen's University
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The organisers of the Belfast Festival at Queen's have said they are working to secure its long-term future.
The university had threatened to cancel the event, but a £150,000 one-off grant from the Department of Culture gave it a lifeline for 2007.
Festival Director Graham Farrell said the festival had become more commercially successful, but still ran at a deficit.
He said they wanted a three-year development plan to secure its future.
Mr Farrell said the Arts Council and Belfast City Council were in the process of fixing their budgets for 2008 to 2010 and that gave the festival organisers a "window" for talks.
"We've been round all the houses and nobody wanted the festival to close," he said.
"Everybody wanted to do their bit, but their hands were tied, which was why it was a minister or bust scenario.
"The minister has come in with a one-year reprieve for us but we have to work to ensure that that sort of investment and more is deliverable over the next three years."
Pro-Vice-Chancellor of Queen's Professor Gerry McCormac said that all the partners of the festival had to come together.
"Although this money falls short of the £500,000 needed, this year's event will contain many excellent performances; but the limited finances available will reflect the scale of what we are able to deliver," he said.
"The reality is that festival has received a reprieve for this year only and what is needed now is for all partners to come together and produce a three year development plan to ensure the sustainability of festival from 2008 onwards as called for by the minister, Maria Eagle."
Announcing the lifeline two weeks ago culture minister Ms Eagle said the festival made "a significant contribution to the artistic, cultural and economic life of Northern Ireland, and Belfast in particular".