Liverpool City Council is asking businesses in the city to support the Mathew Street Music Festival taking place during the summer.
The event, returning for the nineteenth time in August, was solely funded by Liverpool City Council previously.
The council said due to budget pressures it is looking for support from local businesses which benefit from the hundreds of thousands of visitors who pour into the city over the August bank holiday weekend.
The council added that opportunities for businesses are being developed, ranging from stage sponsorship to smaller contributions from pubs and bars.
Letters have been sent out to 300 organisations in the city centre including bars, restaurants and hotels asking them to become sponsors for the 2011 festival and the Mathew Street Fringe festival. A contribution ranging from £250 to £400 is being suggested, with those venues at the heart of the event paying more.
In return for working in partnership with the city council, there will be a range of benefits including recognition as a supporter in all promotional and marketing materials.
Among the first businesses to sign up are the Flanagan Group, which owns establishments such as the Newz Bar, and Cavern City Tours.
The Flanagan Group has donated £10,000 to sponsor a stage on Water Street, near the Newz Bar premises.
Cavern Club and Pub have given £2,000 to sponsor the event, and The Vernon, Garcias and La Cubanita are also contributing up to £400 each.
Cllr Joe Anderson, leader of Liverpool City Council, said: "The Mathew Street Music Festival and Fringe is a popular event and is also extremely important to the local economy – bringing in £20m to the city in 2010.
"However, it is a costly festival to stage and as we're facing £91m cuts this year we need to look at different ways we can raise the funding in order for it to continue.
"Working with local businesses is the logical option as it's in everybody's interests to ensure we can put on an outstanding event as we have done for the last 18 years, and attract as many people as possible. Due to the tough economic climate, we understand organisations are watching every penny, but the whole city reaps the benefits from this event. So, we're asking for any contributions – whether they're big or small.
Bill Heckle, director of Cavern City Tours, added: "I feel it is imperative to put something back in and to this effect we have pledged £1,000 each from both the Cavern Club and Cavern Pub in order to help with the funding of the festival. We have to raise money to ensure the future viability of the Festival but we cannot sit back and expect the city council to pick up the tab because firstly it cannot and secondly it will not!"
- Liverpool City Council said local businesses wanting to find out more about the sponsorship scheme can email firstname.lastname@example.org or call 0151 233 6833 / 0151 233 4552