Organisers of the Belfast Festival at Queen's hope to secure the event after its biggest sponsor substantially slashed its funding.
Ulster Bank made a payment of more than £300,000 towards last year's festival, but that sum is expected to fall by around two-thirds this year.
Festival director Richard Wakely said talks are currently being held with several parties in the hope of making up the shortfall.
"Discussions are continuing with all our stakeholders regarding funding for the 2014 event, which will hopefully draw to a positive conclusion in early March," said Mr Wakely.
"The Ulster Bank Belfast Festival at Queen's recently published its review of its 51st edition with the critically and popularly acclaimed programme illustrating the enduring appeal of the event to the people of Belfast and visitors to our city.
"Its founders never intended the festival to be parochial or a cultural museum, and the festival continues to work hard to be both outward looking whilst ensuring our belief that art is for everyone, is heard and experienced right across the city."
It is understood that Ulster Bank – whose commitment to the festival was up for renewal – has not finalised its 2014 sponsorship position.
In a statement, it said it had been a strong supporter of the Belfast Festival at Queen's for more than seven years and recognised the festival as an important part of Northern Ireland's cultural calendar.
"Our final package of support for the 2014-2015 festival has not yet been confirmed, but we look forward to working with Queen's and other stakeholders to build on the successes of the festival," the statement said.
The funding blow comes just weeks after organisers of the biggest international arts festival in Ireland announced that last year's was its most successful.
One of the key highlights of 2013's event was a signature project called WISH, the UK and Ireland's largest land art portrait, created by the festival's first artist in residence, the Cuban American Jorge Rodriguez-Gerada.
Another defining feature was a new dedicated Music Club that allowed attendees to see live performances by world class musicians alongside new and emerging artists.
The 2013 festival had an audience of just under 46,000 over 11 days which saw 84 different performances from 24 countries, including seven Irish and three UK and Ireland Premieres.
Attendance was up by 46% per day compared to the previous year.
Seven years ago, the festival was under threat but it was saved thanks to a Belfast Telegraph campaign.
Beginning as a small event on the university's campus, it managed to survive the Troubles to celebrate its landmark 50th anniversary in 2012.
Previous festivals have included appearances by world-renowned names as diverse as Jimi Hendrix, Billy Connolly and Kylie Minogue.
Belfast Festival at Queen's 2013 funding: Ulster Bank = £312,500; Arts Council Northern Ireland = £189,150; Queen's University Belfast = £102,044; European Union = £80,000; Northern Ireland Tourist Board (NITB) = £60,000; Belfast City Council = £39,000 (Core) and £20,000 (Parks & Leisure); British Council = £30,000; Arts & Business = £11,000