Organisers of the 25-year-old Sydney Gay and Lesbian Mardi Gras (SGLMG) has appointed outside administrators in an effort to save the event from financial collapse last Friday morning after a mystery saviour backed out 2 days earlier after following legal advice to withdrew his pledge of a A$400,000 rescue package.

Board president Julie Regan told a news conference said that as a result the future of the festival was uncertain.

She said the unnamed financier had put conditions on the board it could not meet. The conditions included a requirement that the Mardi Gras board, directors and employees personally guarantee his A$400,000 loan.

Only a few weeks ago, it seemed that the financial woes of the SGLMG had been resolved after group of investors had pledged a guarantee to the festival's bank.

The state government of New South Wales has also refused to bail out the company. Acting New South Wales treasurer, John Della Bosca, told the media: "The reported A$400,000 needed by the organizers to keep the Mardi Gras going would be better spent on hospitals, roads or drought relief."

The Australian festival posted a A$500,000 loss this year attributing it to a slump in the number of visitors following the September 11 terrorist attacks combined with spiraling insurance costs.

The three-week cultural festival that culminates in a huge parade and party that draws more than one million people each year and has been estimated to provide a A$100 million boost to the New South Wales economy.

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Simon Pascoe from the accounting firm Sims Lockwood who will oversee the restructuring of Mardi Gras over the next four weeks has said in a statement that they are confident they can solve the company's financial problems.

"We are confident that it will be possible to come up with a new financial package that will enable the company to recover from its current financial difficulties," he said. "A number of potential supporters have already indicated that they may be prepared to support the company, financially, provided there is restructuring."

In another blow to Mardi Gras before Friday's announcement, Pride - who was originally producing the Sleaze party for Mardi Gras - announced on Thursday that it had withdrawn its support as a guarantor for A$50,000 of Mardi Gras' A$250,000 bank overdraft and would not be producing the party for Mardi Gras.

Auditor Alan Topp of Sims Lockwood told the Sydney Star Observer that "arrangements were now being made" to ensure that Sleaze Ball goes ahead this year as planned.