A mirrored big top which proved the dazzling highlight of the 2004 Brighton Festival faces the axe next year after a bust-up between rival venues.

The spat threatens the return of the Famous Spiegeltent, a travelling cabaret tent built in Belgium in the Twenties, which swiftly became as much of an attraction as the many curious acts it hosted.

The worlds of art and commerce have collided in a row between organisers Brighton Festivals and Komedia.

Managers of the Gardner Street theatre accuse the tent of creaming off their custom.

They lodged a formal complaint with the city council and say the only way the Spiegeltent should return is if they can work with its owners and help programme the events.

The Brighton Festival team has been working since May to bring the venue back and has earmarked a new spot in the city after complaints of noise from residents this year.

The festival used the tent for some of its books and debates programme and would like to collaborate in the same way this year.

Members of Brighton and Hove's arts community fear the disagreement could mean the Spiegeltent does not return.

One said: "The festival has found itself between a rock and a hard place. The council has asked the festival to back out and allow Komedia to programme the Spiegeltent.

"People are worried that because of all this political posturing it might not come back at all."

Time is running out for a resolution to the row.

The source continued: "The problem is the festival only has until the end of the month to put forward its application for an entertainment licence. This really is the 11th hour.

"The council has told the festival it has to reach an agreement with Komedia. It's bully-boy tactics.

"The festival made it happen and worked really hard to bring the Spiegeltent to Brighton. It was a huge risk but in the end was a huge success.

"Now Komedia expects to step into its shoes and the festival team is worried the Spiegeltent won't come at all."

It was the first time the Spiegeltent, which has hosted legends including Marlene Dietrich, had been to Brighton.

It is a regular fixture at the Edinburgh Festival and other arts events around the world including Adelaide in Australia.

Magician Paul Zenon, who lives in Brighton, has performed in the Spiegeltent for the last six years.

He said: "I think what Komedia has done is fairly outrageous.

"I've been in Brighton for 20 years and this was the first time the festival felt as though it had a focal point.

"The entire festival profits overall from having the Spiegeltent here and the festival brought about £20 million to the city this year.

"For any venue to claim it did not profit from it is ridiculous.

"The problem is, Komedia has had it too easy for too long because it has been the only venue of that sort.

"If it doesn't want competition the next thing would be to close the Theatre Royal or the Corn Exchange.

"If the Spiegeltent does not come back because of Komedia there's a severe possibility there will be a boycott.

"I've spoken to the Spiegeltent's owner, David Bates, and he is genuinely upset at what has happened."

Broadcaster Simon Fanshawe, involved in Brighton and Hove's bid to become City of Culture 2008, said: "It would be a great shame if there was no Spiegeltent but probably a greater shame if there was a Spiegeltent that affected other venues negatively."

A spokeswoman for Komedia said: "Komedia is looking forward to working with David Bates to bring back the highly-successful Spiegeltent next May as a venue for fringe events, the Brighton Festival and Brighton Fringe Festival Club."

Festival head Jane McMorrow said: "We were ready to put everything in place but we've had to put the plans on hold while this is sorted out.

"I'll be really upset if it means we have no Spiegeltent for 2005."

Mr Bates said: "It seems The Spiegeltent is a victim of its own success.

"We would be so disappointed, and so would thousands of Brighton residents, if it could not come back to the city for fear of threatening the viability of other businesses.

"I am more than happy for Komedia to be one of the presenting producers."