A row over funding means there will be no Macnas parade at the Galway Arts Festival this year for the first time in more than a quarter of a century.

The parade, which is normally the centre-piece of the festival, will not take place this year, the organising committee announced this morning.

In a statement the committee said the street performers had asked it to cover nearly three quarters of the total costs of staging the event, an increase of more than 200 per cent on last year's investment.

"Galway Arts Festival was not in a position to meet with the company's request to cover over 70 per cent of the costs of the parade and has never been in a position to invest this level of funding in any organisations' work," the organisers said.

It said that Macnas had told it that it would able to cover just 20 per cent of the costs of a parade this summer "and could not move beyond this figure as the remainder of their funds was committed to other productions".

Festival organisers expressed their disappointment that the parade will not be part of this year's Festival but wished the company well "with its other plans for 2013".

Macnas, which has organised an annual parade in Galway since 1987, disputed the figures in the Festival’s statement and said the level of funding it had been getting from the organisers was just 10 per cent.

Its general manager Sharon O’Grady said there had been in discussions with the Festival to put “a more realistic funding model for the annual parade in place” ongoing for several months but talks had broken down without agreement.

“Galway Arts Festival’s cash contribution to the cash cost of staging Macnas parades in recent years was less than 10 per cent of the €100K,000 direct cost,” Ms O’Grady said.

She said the street theatre group had been absorbing 70 per cent of the cash costs with the balance being covered by Galway City Council’s contribution.

“Macnas had advised the Festival in this inequitable level of contribution could no longer be sustained and it threatened the continued existence of the company,” she said.

Ms O’Grady said she had sought to secure “a more fair and reasonable contribution from the Galway Arts Festival towards the costs of the annual Macnas Parade” but added that the Festival had been “unable to assist in sourcing alternative funders and eventually withdrew from negotiations”.

She said the theatre group was however committed to staging a parade in Galway before the end of the year and that it was now exploring alternative ways to deliver this event “by engaging with potential funders and stake holders” in a move which she said “further confirms Macnas’ commitment to the city and to the 26 year old tradition of presenting spectacle on the streets of Galway”.