The Isle of Wight Council has accused 2011 Island Games Organising Committee Chairman David Ball of "scaremongering".
Earlier reports suggested the week long event, scheduled to open on Saturday 25th June, might have to be cancelled if a further £350,000 of funding from the local government authority was not forthcoming.
In a statement, the council says it fully supports the Island Games taking place next year and the relevant funds are still in place - despite the current tight financial situation.
However, Deputy Director for Economy and Tourism John Metcalf says they still do need details from organisers about how and where the money is going to be spent:-
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