Like all the best ideas, Lewes Guitar Festival was born out of a drunken conversation.

"Me and a couple of friends were drinking too much wine one evening at my house in Lewes," says co-founder and Festival Director Laurence Hill.

"We were talking about how so many 0guitar makers had set up shop in Lewes. There were five full-time makers in the town at the time, including my brother Stephen. We wanted to celebrate that, and put Lewes on the musical map."

Seven years later, they have succeeded. The first Festival - an instant hit and a complete sell out - started small with just two participating venues in 1999, and has since grown into the biggest of its kind in the UK. For one week every summer, guitar aficionados and music lovers from all over the world descend upon the small Sussex town to experience the very best in acoustic guitar music from gipsy jazz and bluegrass to folk and flamenco.

The reason for its popularity lies not only in the quality of music on offer - "people trust our judgement" says Laurence. "We choose performers both for their originality and their excellence" - but also for its diversity.

The line up is different every year, with plenty of new names. "We always have one or two wild cards as well," says Laurence, "people who rarely tour or perform so it is a rare treat to see them play live. In the future, I would love to have Joni Mitchell, Bob Dylan, Jose Gonzalez, Amadou and Mariam classic singer-songwriters are high up on my wish list; English people such as Richard Thompson and also American country singers such as Nanci Griffith."

The hot ticket this year is Loudon Wainwright III, Sixties folk legend and father of Rufus and Martha.

There are also respected artists from China, America, Argentina, Africa, Australia and the Netherlands - some of whom rarely visit the UK and others making their UK debut - plus the cream of home grown talent.

Headliners include Dutch virtuoso Lollo Meier and his band continuing their mission to keep Django Reinhardt's gipsy jazz alive; captivating Chinese pipa player Liu Fang; America's Alex de Grassi, one of the world's top finger style, steelstring acoustic guitarists on a rare UK visit; BJ Cole, king of the pedalsteel guitar and Pa Boba Jobarteh Trio, kora masters from The Gambia.

Argentine duo Las Morochas - Cecilia Zabala (guitar) and Ianina Pietrantonio (flute) - will be making their UK debut at the festival while Clive Carroll, leader of the new generation of steel-string players, flies the flag for Britain.

A big draw on Friday, August 4 will be an infectious, high-energy hoedown courtesy of "rockgrass" rebels Hayseed Dixie, Brighton's own The Curst Sons playing American roots music at its stomping best and Australia's Von Trolley Quartet with their unique brand of vaudeville rock played on ridiculously small instruments.

The Saturday night Songwriters' finale features not only festival headliner Loudon Wainwright III but also acclaimed Nashvillebased Texan Darden Smith and Brighton-based, Martha Tilston, a rising star on the folk circuit who has been dubbed the female Damien Rice.

Gig locations, all within walking distance around the town, include the solar-powered stage in the beautiful gun gardens of Lewes Castle for free lunchtime concerts; the restored 16th-Century country pile Pelham House for 5pm concerts; the atmospheric All Saints Centre; the Southover Grange Gardens and for the first time, a big top at Mountfield Road playing fields.

"The outdoor concerts are my personal favourites," says Laurence. "Partly because they are free, anyone can rock up. They are lovely spaces and it is so relaxed, creating a proper festival vibe.

People can bring along picnics, a couple of beers or a bottle of chilled wine. It is a great buzz to put on an event and give pleasure to so many people.

"Last year, more than a thousand turned up to hear Trio Gitano and the Martin Harley Band in the Grange Gardens. Not only does the Festival give Lewes an identity and enrich the cultural landscape a bit, it is a great excuse for a big summer celebration in our own back yard."

For Laurence and his team working hard behind the scenes, another key motivation is a passion for good music and its power to move people, and to promote the local guitar-making industry.

"Everyone loves guitar music," says Laurence. "Personally, I adore flamenco, and the great singer songwriters, too. Really good music transcends normal reality and can profoundly affect people. I guess that's what switches me on. My best experience of the festival and possibly most memorable gig ever was when a guy called Paco Fernandez from a famous flamenco family in Spain came over.

Within the group was a young male dancer who was completely unknown at the time. He only performed during two songs but each time he danced it was so amazing, the whole audience of about six hundred people leapt out of their seats to give him a standing ovation.

"Now he is one of the top flamenco dance stars in Spain. We caught him just at the start of his career. We make an effort to catch people who are on their way up in the acoustic field as well as putting on established performers.

"We are delighted with this year's line up - it's probably the most cosmopolitan mix in the festival's history - a real melting pot of talent."

Other events include an exhibition of guitars at the Star Gallery, Castle Ditch Lane, which showcases the guitars made by the Lewes luthiers who specialise in acoustic steel-string, flamenco/classical, mandolin and Baroque-period instruments.

Mary Flower, one of America's best blues and roots performers, will give a slide guitar class. There will also be a gipsy jazz rhythm guitar class and acoustic classes at the Subud Centre, Station Street, by Alex de Grassi and Clive Carroll as well as a pipa demonstration and talk by Liu Fang.

Last year's innovation, the International Guitar Makers Forum, cementing Lewes' reputation as an international hub of the craft, returns, aimed at both professional and amateur luthiers and featuring a tour of the Lewes guitar workshops and talks by speakers including George Lowden, founder of Lowden Guitars. And keeping up the Spanish-flavoured, easy-living feel of the festival will be Elena's famous Tapas Bar.

Visit www.lewesguitarfestival. or call 01273 480218 for more information.

Go to www.theargus.co.uk/the_argus/the_guide/lewes_guitar.html for a full guide to what's on at the festival