The Edinburgh Fringe Society said it has reduced staff numbers by a third to try and weather the financial storm during the pandemic.
MSPs were told the festival’s “world-leading status” is under increasing threat without a major injection of public funding to help it recover.
Organisers of the festival, due to celebrate its 75th anniversary in 2022, warned it could take at least three years for a recovery to be staged.
A dossier for Holyrood’s culture committee called for the society, artists, companies and venues to receive “longer-term cultural recovery funds” to help rebuild the Fringe.
It stated: “The Fringe is more than a festival, it is a major arts marketplace for artists, producers, scriptwriters, stage and lightening designers, and the whole cultural ecosystem the length and breadth of Scotland.
“It is a global showcasing platform where artists have their work seen and potentially bought for touring across Scotland, UK and internationally – or commissioned for further development for stage and screen.
“The potential of two to three years without our normal routes to income generation leaves venues, companies, artists and the Fringe Society in a precarious financial position.
“Recovery is going to take years and we will need a sustained public investment effort to support that.
“With 2021 looking precarious, and certainly not like a normal year, many artists, producers, companies and venues will struggle to keep their businesses afloat, let alone be able to return in 2022, when culture will be most needed to help society recover.
‘Recovery is going to take years and we will need a sustained public investment effort to support that.’Fringe Society
“Fringe Society is in the unique and vulnerable position that it is not core funded by any government agency.
“Recovery relies on the survival of venues and artists, including third-party suppliers and freelancers and their ability to bring work to the Fringe in 2021 and beyond.
“The ever-increasing possibility of ongoing social distancing and potentially no, or little, live performance means that careful recovery projections are destabilised across the Fringe landscape.
“The Fringe Society continues to apply for funding opportunities and grants, but without access to regular public funding and critical investment, we are now facing another year without any substantial income and facing a precarious financial situation and future.
“Without further emergency financial intervention, we had no alternative to freeze recruitment and carry out a redundancy process reducing our staff by one third, which will undoubtedly impact on critical areas of our delivery that have significant cultural and social value.
“We’ve now stripped back all our services and prioritised activities that focuses on digital transformation and alternative income generation.”
A spokeswoman for the Scottish Government said: “A great deal of work is underway, in partnership with all major elements of the culture and events sector, including the Fringe Society, to develop a route-map towards an incremental and cautious re-opening of live events.
“We’ve prioritised support for the long-term viability of the Fringe, including providing the Fringe Society with an interest free loan of £1m in June 2020 as well as a further £81,000 grant in December 2020, to support their resilience, mitigate redundancies and develop their digital and ticketing platforms to ensure the Fringe retains its well-earned global status.”