Brighton council has postponed this weekend's Stella Artois Screen film festival, because it says it cannot guarantee public safety.
The news comes as further disappointment to licensees in the area whose trade was affected when the T4 dance concert was cancelled the week before, because the beach was still out of bounds after revellers left tonnes of broken glass and rubbish behind them.
Now businesses are worried that all future events will be cancelled - which would be a huge blow to the local economy.
A spokesman for Brighton & Hove Council denied that all of the city's outdoor events were now in jeopardy. He said the decision had been made to give the emergency services and police a break and because they did not want to put unnecessary pressure on them.
"We can't predict how many people would turn up. But after an exhaustive cleaning operation of the beachfront it's now safe. There were people sunbathing on the beach on Wednesday," he said.
But local licensee Tony Leonard is concerned that this could signal a tough time ahead for licensees in the area who are reliant on trade from outdoor events.
"It's a real shame," he said. "Licensees are worried that after the Fat Boy Slim concert, the council is going to cancel everything. I don't think they would have been overwhelmed with numbers at the film festival.
"It's not the same as the gig. People will only come to the festival if they are already in the area or if the weather is particularly nice."
Two hundred and fifty thousand people flocked to the beach on the south coast for the free Fat Boy Slim concert - almost 200,000 more than expected.
Revellers left tonnes of rubbish and dangerous broken glass behind them - raising concerns that it would be years before the beach was safe to walk on again.
But, despite the huge numbers, there were fewer arrests and fewer injuries than a typical Saturday night out in Brighton. The concert may well return to Brighton beach for its third year, if safety can be guaranteed. Organisers are considering running it as a free ticket event, enabling them to keep an eye on numbers.
Meanwhile, licensees and representatives from the tourism community will be holding a meeting in August to discuss the issue in further detail.
Related articles:
Future looks bleak for Brighton pubs (23 July 2002)
Fatboy Slim gig a hit with Brighton licensees (15 July 2002)