The council which will welcome next year's Urdd Eisteddfod does not know if it can afford the £300,000 it has promised to the event.
The Eisteddfod will still visit Conwy, say urdd organisers
Originally, Conwy Council had said it would give the money towards the costs of festival in Penrhyn Bay in May.
But council leader Goronwy Edwards said financial constraints meant the council had to reassess all its spending.
The urdd said any loss of support would be a "blow" and facilities would have to be reassessed.
"The council had promised £300,000 to the eisteddfod two to three years ago, but at the moment because of our settlement, we have to look at all our spending and make sure that council services are maintained," said Mr Edwards.
He said the council was having to reassess all its spending, and not just on the eisteddfod.
"We only received a settlement of 1.1% in the budget, which is very low, and so the money available to sustain services is much lower," Mr Edwards said.
No discussion has yet taken place on financial support, but the council's scrutiny committee has refused other applications for assistance, including one from the Royal Welsh Show.
"Things are very tight but I do hope that the council will be able to keep our promise to the urdd," said Mr Edwards.
"The last thing we want to do is not give the money, but council services must come first."
A meeting has been arranged next Wednesday with the Welsh Assembly Government to discuss the council's financial settlement.
Eisteddfod director Aled Sion said the support of the council was important.
"It is a reflection of the current situation regarding local authority funding which can lead to an adverse effect on their investment in various festivals and events such as the Urdd National Eisteddfod," he said.
"It would be a substantial blow to the Urdd Eisteddfod if the investment was not forthcoming and we would have to reassess the level of provisions and facilities on the eisteddfod maes [field]," he added.