The 2004 event entered the Guiness Book of World Records
Newtown's Santa Run broke the world record for the most people dressed as Father Christmas in one place at one time in 2004.
But as the event celebrated its 10th birthday on Sunday 28 November numbers had dwindled from the record 3,445 six years ago to a mere 200.
Organisers blame the decline on hundreds of similar events now being held throughout the UK.
Newtown hosted the world's first ever Santa Run in 2001.
The annual event is organised by Newtown and District Dial-a-Ride, a community charity providing transport for the elderly and people with disabilities.
Half of the proceeds from the run go to Dial-a-Ride and the other half to a charity of each competing Santa's choice.
Steve Evans, Dial-a-Ride's transport co-ordinator, said: "Newtown is the home of the original Santa Run when 500 people took part in the first event 10 years ago.
"But the success of the event meant that other organisations decided to take it up and there are now hundreds of similar events across Britain at this time of year.
The full Santa Run course covers four and a half miles
"We did try to copyright the idea, but unfortunately no one is allowed to copyright Santa Claus."
Mr Evans added that because of the uniqueness of the event people had travelled to Newtown from all over Britain to take part during the first part of this decade.
"Now there are events as close to us as Tywyn and Oswestry so people are less likely to support us," he said.
The event has raised at least £150,000 for charity during the last decade, but is still a viable means of raising money, according to Mr Evans.
"We fully intend to keep the Newtown Santa Run going because as far as we are concerned it is the first and still the best."