It promised to be one of the best yet, with 19 folk groups from countries across the world preparing to converge on Teesside.

But the 2003 Teesside International Eisteddfod, due to take place in Middlesbrough in July, has been cancelled.

It has been an integral part of the festival for local families to take the visitors into their homes during the competition.

But the management committee has been unable to guarantee most of the competitors poised to travel to Teesside, a bed.

Organisers hope the problem exacerbated by the international situation and war in Iraq, will prove to be a glitch.

Eisteddfod chairman Derek Richmond said: "We are meeting in the fairly near future, involving everyone; management committee, area organisers. We will sit down, put everything on the table and see where we go from here.

"We have made a decision for this year, but no decision on the future.''

When the eisteddfod began 40 years ago, Mr Richmond, who is now retired, was 20 years old. Organisers had a large support base with families able to take the members of 42 groups into their homes.

Over the decades that level of support has shrunk.

Mr Richmond said: "The number of beds required in homes across Teesside and the surrounding areas for visiting competitors has fallen well short of our estimates. This is compounded with a shortage of area organisers to develop existing areas and to look for new areas for hospitality for the foreign competitors.''

He added: The bottom line has always been that we are unable to invite European visitors to the Eisteddfod unless we have the beds and accommodation for them. The current international situation and its uncertainties has not helped.''

General Secretary Mavis Lloyd said: "I am very disappointed. It would have been the best selection we have had for years. And the groups are disappointed.''

A Middlesbrough Council spokeswoman said last night: "Projects to bring different cultural groups together are very important to Middlesbrough that is why we have continued to support the Eisteddfod for a number of years.

"We would be happy to meet with the organisers to help look for a solution to their problems.''