Another Brighton festival has succumbed to the recession, less than a week after Beachdown was cancelled at the eleventh hour.

Organisers of Loop Brighton, a celebration of digital culture, have called a meeting with creditors after admitting the company has gone into liquidation.

The festival took place in July for the third year, but was badly affected by the economic climate.

Event organiser Jason Clarke said: “Our ticket sales were not as expected.

We did really well outside of Brighton and sold well internationally, but locally it was very slow.

Mr Clarke would not reveal the extent of the company’s debt but said it cost between £150,000 and £200,000 to stage the event.

He added that a number of festivals in the UK had not gone ahead this year as a result of the recession.

Brighton’s Beachdown festival was cancelled at the last minute on Wednesday.

He said of Loop: “We are very glad that we put it on.

We thought we may have had to pull it but that would have let down a huge number of ticket holders, but we had expected to make a bit more money.

“Loop is a very small organisation run by a handful of people and there was a lot of our own money going into it.

“We were keen in our third year to secure a greater degree of sponsorship but in the current climate it has been really difficult.

“We also went back to the banks to try to raise additional funds but they weren’t keen to lend.

“The idea of Loop is something I have been working on for six or seven years.

I invested a huge amount of my own money in it, including re-mortgaging my house, so to be in a position where we can’t do it again next year is hugely disappointing.”

Mr Clarke praised Brighton and Hove City Council and the Arts Council for their support.

A spokeswoman for Brighton and Hove City Council said: “It’s always a shame when a local business folds, especially one that has been attracting visitors in to the city and developing new artists.

“That said, we still have a thriving industry in digital music and arts across the city and it’s an area we will continue to nurture.”