Lost Weekend is due to take place on 23rd – 25th June at Powderham Castle, Devon, but a few days ago the festival's financial backers AEGLive pulled out unexpectedly.
However, just as soon as the festival's organisers announced a formal cancellation, a new potential backer came forward, and is now discussing the possibility of rescuing the event.
A decision one way or another is expected to be announced within 24 hours.
Lost Weekend organiser Roy Gurvitz said: "Obviously we were devastated when AEGLive told us they were pulling out.
"It was completely unexpected that they should leave us in the lurch like this at the 11th hour.
"We felt especially sorry for the artists and the ticket holders who were looking forward to a fantastic substitute to Glastonbury.
"However, all really is not lost. We're having serious discussions with the new potential backer and we hope to be able to announce this evening that the Lost Weekend is going ahead after all."
Ticket holders are being urged to be patient while the organisers await their financial fate.
Roy Gurvitz continued: "If we do have to cancel, I can reassure all ticket holders that they will be refunded.
"However, we truly hope it won't come to that.
"Our aim at this moment is to ensure that everything goes ahead."
Check back on DJmag.com tomorrow for the latest Lost Weekend news.
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