Guilfest looks set to return in 2009 after global promoters quashed plans to stage a larger event at Stoke Park, Guildford in Surrey.
A consortium that included AEG Europe, the company that owns the O2 Arena, is said to have withdrawn plans to host a festival after overwhelming opposition appeared on the Internet.
Over 1,800 members joined the 'Save Guilfest' group on Facebook in protest of the proposal, after discovering that the plan would spell the end of the festival. The council only permits one event to be held at Stoke Park each year.
Speaking about the withdrawal David Campbell, CEO of AEG Europe said: "We are saddened to confirm that as a result of petitions being organised against our company, we have decided to withdraw from any further discussions with the council.
"We are not going to engage in a public slanging match. The most important thing is that concert-goers, artists and the local taxpayer get the very best outcome.
"As residents, visitors and interested observers, we wish Guildford Borough Council every success in developing live entertainment in the town."