A fraudster is using the financial struggles of Pride to try to con money out of businesses.

The man called hotels in the Kemp Town area of Brighton claiming to be collecting cash for Pride, just a day after it announced a £50,000 deficit.

The conman, who called himself Philip, telephoned Coward’s Guest House in Upper Rock Gardens, Brighton, on Saturday.

Gerry Breen, who runs the guest house, said: “He asked me whether I had heard the news about Pride and I said yes and he said, ‘I have rang a few of your neighbours and they are contributing £150 to it’.

“I said I had just contributed £100 towards the AIDS memorial, so I suppose I could do the same.”

However the man then became angry with him and after Mr Breen refused to pay £150 he slammed the phone down.

Mr Breen said: “It’s an absolute con.

“He had also rung a friend of mine two doors away.

“I would have sent a cheque anyway, I wouldn’t have given out my card details but obviously someone might have been willing to hand their details over.”

Judith Manson, Pride’s fundraising and communications manager, said: “This is nothing to do with Pride. It is a scam.

“It is just dreadful that someone would do this and try to make a buck on the back of a serious story.”

Ms Manson said the incident would be reported to Sussex Police.

She added that she would personally contact potential sponsors directly and face to face interviews would take place for new sponsors.

Pride board members announced on Friday that they needed to raise £50,000 by the end of the year or that the 2010 event would have to be on a significantly smaller scale than previously.

Ms Manson said the support from the local community since the announcement had been encouraging.

She said: “It is quite early days but we have had a tremendous amount of support.

“People are rallying around and saying we can’t let this happen. Pride is so important for the community and the city as a whole.”

The news reopened the debate about how the event should be funded.

The city’s Liberal Democrat councillors say the council should do more to keep Pride free.

Paul Elgood, the leader of the Liberal Democrat group on the local authority, said: “The council subsidies a range of events in the city from the Brighton Festival to party conferences. It should now look at grant funding to meet the £50,000 deficit from this year's event.

“The event is so crucial to summer tourism and attracting visitors, it would be money well spent.”

Dee Simson, the council’s cabinet member for community affairs and inclusion, said: "Pride is very important to the city of Brighton and Hove and it is an event which the council would like to see continue.

“It brings benefits for all communities and for the city's businesses and attracts a broad spectrum of people which reflects and enhances the city's reputation.

"The council's contribution to the event is primarily one of support and encouragement with the majority of cost being borne by the charity itself.

“Our expenditure on the day is modest enough to be borne by funds generated by our services rather than at cost to the local residents.

"We appreciate the challenges bought by success and we will be exploring any opportunities to help the Pride organisation increase fundraising in the city."