An independent inquiry into the failure of the Edinburgh Festival Fringe's box office system has been announced by the organisation's director, Jon Morgan, in a move designed to end a row with venues and promoters over lost ticket revenue.

The inquiry was ordered as a number of promoters considered compensation claims against the Fringe after the collapse of its newly installed computerised box office.

For seven weeks between the announcement of the festival's programme and the opening of the first shows at the end of July, no tickets were printed or posted to customers - removing advance sales from many venues' budgets.

Estimates of the sums involved vary wildly, but tens of thousands of pounds seem likely to be claimed in compensation, and one promoter, Laura Mackenzie Stuart of Universal Arts, spoke of the Fringe being on the brink of “financial ruin”.

Fringe officials dismissed such suggestions, but admitted that the organisation would “take a hit” as the Fringe was obliged to fund temporary solutions to venues' ticketing problems.

Mr Morgan detailed the inquiry in a letter to all venue managers, and said that its remit would extend to “the broader structure of the Festival Fringe Society”.

The announcement came before a hastily arranged meeting today between Fringe officials and venue managers. Mr Morgan said that the meeting would enable groups “to air any concerns about recent events directly to members of the Fringe board”.

Last Friday the Associated Independent Venue Producers (AIVP), which represents 18 Fringe production houses, said that it had lost faith in “the competence of the Fringe Society's Board of Directors”.

In an open letter to the 14 directors of the Fringe board, Ms Mackenzie Stuart, chairman of AIVP, said: “The failure to plan and successfully implement [the new box office system] indicates a fundamental lack of relevant expertise amongst board members. This has resulted in the Fringe Society reaching a point of potential financial ruin.

“AIVP's intended plan of action is to unite with the broad range of Fringe stakeholders, including performers, promoters and venue managers who are in agreement with our position. Such extreme action is a measure of the fear and anger felt by AIVP members.”

Ms Mackenzie Stuart's position was not shared by all Fringe promoters. Tommy Sheppard, the proprietor of the Stand Comedy Club, said that the venues and the Fringe must continue to work together.

“It is important that we keep a sense of perspective but make sure there is no repetition of the problems that have beset the Fringe this year. We should start now on the basis of constructive engagement, rather than acrimony,” added Mr Sheppard, who will stand for election to the Fringe board at its annual meeting on Saturday.

Mr Morgan also defended the Fringe. “Considering the problems we have experienced with ticketing in this year and looking at the wider economic situation we think that it's been a fantastic Fringe so far,” he said. “Hundreds of thousands of tickets have been sold and the Fringe Society is financially secure. More importantly many Fringegoers are out enjoying shows.”

The Fringe boasts that it is the biggest arts festival in the world, and last year's sales figures would appear to support the claim. The Fringe box office sold 617,168 tickets, representing 36 per cent of tickets sold for 2,000 productions during August 2007.

To cope with increase demand for tickets this year a new system, called the Liquid Box Office and supplied by Pivotal Integration, was launched on June 9. Services were suspended the following day.

Four of the best known Fringe promoters were among the worst hit. Sweet, C Venues, Universal Arts and Paradise Green were invited by Fringe officials to become the first fully-

integrated venues in the new ticketing system with each promoter passing responsibility for all ticket sales to the Fringe box office.

But all four were left without vital data about ticket purchases and temporarily out of pocket. Ironically, salvation came from the organisers of the Edinburgh Comedy Festival, which was launched to criticism that it attacked the “spirit of the Fringe”.

The comedy festival operates an online booking system called Red61, which was extended to provide online ticket sales for the “linking venues”. The cost of this switchover has been borne by the Fringe.

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