The Cuba St Carnival, Wellington's hugely popular biennial street party, has been axed next year and its future remains uncertain amid funding woes.
Organiser Chris Morley-Hall blamed Wellington City Council, saying it was instead spending its money on next year's Rugby World Cup.
However, council spokeswoman Michelle Brooker said Mr Morley-Hall simply asked for too much money, and spending on the Rugby World Cup had not affected it.
The council was asked for $500,000 - much more than the $200,000 the council had previously provided, she told the Dominion Post.
"We basically said no, we weren't prepared to do that, because we couldn't justify that increase in rates."
Funding for future carnivals is also uncertain.
"They're unable to commit to even a low-level of recurrent funding. And it's just too difficult for us to continue with that not knowing," Mr Morley-Hall said.
Last year's carnival drew a record 150,000 people and was called an "internationally-recognised Mardi Gras" by Wellington Mayor Kerry Prendergast.
Artists and community groups have called the news of the cancellation a "huge loss for Wellington".