The Edinburgh Festival opened yesterday with broadsides by the event’s artistic directors. Jonathan Mills, the newly appointed head of the International Festival, gave warning that he may quit over the “poor” level of public funding while Jon Morgan, the director of the Fringe, said that his event was in danger of being dominated by too much comedy.

Mr Mills said that the festival could become just “a weekend event” unless the Scottish Executive and the City of Edinburgh lifted financial constraints. “I am going to say at a certain point, ‘If the festival cannot afford to put itself on for this amount of money, then it will reduce the amount it puts on.’ There will be fewer nights in the Usher Hall, fewer nights in the Kings Theatre, fewer things we do. We won’t be doing a different kind of show — we will absolutely be doing the same quality of work, but over less time.”

He said that it would be a case of “Honey, I shrunk the festival.”

The International Festival — one of several held in Edinburgh during August — receives £4 million of public money, but its programme costs this year are more than £8 million, and it has a deficit of £500,000. The gap is made up by sponsorship and ticket sales but, said Mr Mills, without significant investment the event would suffer “the death of a thousand cuts”.

Mr Mills, the former artistic director of the Melbourne Festival, was appointed director last year and critics have already praised his programme, the highlight of which is a celebration of the 400th anniversary of the opera L’Orfeo. He is not the first festival director to complain about public funding levels, but his comments are by far the most outspoken. He said that the public subsidy had to be raised to keep pace with international competitors. In Salzburg, the arts festival received about £10 million in aid, but sold most of its tickets at a significantly higher price than Edinburgh.

Mr Mills said that the response from government circles had been “surreal”. Quoting from the TV programme Yes Minister, he said: “Sir Humphrey Appleby’s statement ‘I have been given every assistance short of help’ comes to mind. If there is not a radical rethink of what the festival is going to be doing, it is not of interest to somebody like me. If I can achieve something I will stay, if I can’t, I’ll leave. If you want the greatest orchestras, the greatest productions, it comes with a price tag. I don’t even know what my budget is from the City of Edinburgh Council next year.”

Mr Mills said that a reduced festival would have a potentially devastating effect on the Scottish economy. “It is going to be the death of thousands of cuts. It is not going to be solved by a kind of giant crisis management. It is going to sort of ebb away from us and one day someone will wake up and say, ‘That £145 million a year economic benefit delivered year in, year out, by Edinburgh’s festivals in August — how can we get it back?’.”

He claimed that an absence of political leadership at all levels of government had resulted in a failure to recognise the importance of the Edinburgh festivals to the country as a whole. “There is a huge gap between the rhetoric that was spoken and the reality which was delivered. It’s a fairly ubiquitous failure — you cannot blame one group from one party, or one tier of government.”

A spokesman for the Executive said: “We are looking at ways and means to enhance our involvement and support to add even more value to these fantastic festivals, and ensure that Edinburgh maintains its world reputation and lead over rival events.”

Mr Mills’s attack came as his opposite number at the Fringe suggested that his event was in danger of becoming “just a comedy festival”.

Mr Morgan, who took over as the festival’s director more than a month ago, angered comedy promoters by suggesting that other art forms should be shored up. Comedy has driven the sprawling expansion of the Fringe to more than 2,000 shows and this year makes up 30.5 per cent of the programme, half a per cent less than theatre.

Mr Morgan told The Times: “I’ve been talking about setting up some kind of fund for supporting under- represented art forms at the festival.” These include certain categories of contemporary dance and theatre but not quirkier comedy acts. “Comedy does not need my help. The comedy element of the Fringe is really, really important and has been for a long time. It gives it a profile and an audience it probably wouldn’t otherwise have. I’m not knocking the comedy and saying we should’t have it, but I am recognising that the cost of producing theatre is getting more expensive than stand-up comedy.”

Mr Morgan believes that theatre companies are turning their backs on the Fringe for the sake of “a few hundred pounds”. He proposes to cut venue licensing charges and accommodation costs, possibly by erecting tented villages for performers.

“The spirit of the Fringe is about innovation and new blood. I want to make sure that people still want to come and perform here and see it as the place to cut their teeth,” he said.

“It’s the best showcase in the world but it’s still a difficult call for a producer of theatre or dance to work out whether coming here is going to be worth the probable losses. My job is to turn that around.”

Theatre producers applauded Mr Morgan’s ambition. Michael Lessac, artistic director of Truth in Translation, a hotly tipped musical play based on the Truth and Reconciliation Commission hearings in post-apartheid South Africa, said: “It’s been almost impossible to put the show on here. It was as hard as any place we’ve ever been to, and we’ve been to Rwanda.” But Nica Burns, producer of the if.commedies awards (formerly Perrier awards), said: “Is comedy taking away from the Fringe? Absolute bollocks. It’s adding to it. If comedy wasn’t wanted the audiences wouldn’t come and they come in droves.”

She said that the Fringe Society, Mr Morgan’s organisation, needed to think through plans to subsidise specific acts or risk spoiling the democratic ethos of the festival. “The Fringe Society’s job is to make sure everybody gets an equal amount of help.”

Hannah Chambers, the agent for Jimmy Carr and Frankie Boyle, two of the most in-demand comics at the Fringe, added: “Subsidising certain parts of the festival goes against the theory that this is a completely open festival where you will do well on your merits. Helping certain areas more than others seems unfair.”

Yesterday more than 50,000 people lined Princes Street to watch the Edinburgh Cavalcade, which kicks off the festival season.

The International Festival runs from August 10 to September 2, but it is its unruly offspring, the Fringe, which is the biggest crowd-puller. This year it will feature an estimated 18,626 performers in 2,050 shows at 250 venues. More than 1.5 million tickets were sold during the event last year, making it the world’s biggest arts festival.

Top fringe shows

1 Lady Boys of Bangkok

2 Frankie Boyle

3 Jason Byrne Shy Pigs, With Wigs, Hidden In The Twigs

4 Adam Hills Joymonger

5 Jimmy Carr Repeat Offender

6 Rich Hall

7 Fuerzabruta

8 Mark Watson Can I Briefly Talk To You About the Point of Life?

9 MacAulay and Co

10 Soweto Gospel Choir