The popular Hamilton East Community Festival scheduled for Sunday has been cancelled this afternoon because of "administrative issues" with its permit application to the city council.

People involved in the festival say they are bitterly disappointed and one described the late cancellation as diabolical as they worked to contact festival performers and food vendors to share the bad news.

The annual festival in Steele Park is organised by the Hamilton East Community Trust, a group of local residents dedicated to preserving the suburb's heritage and ensuring it remains an attractive place to live.

Trust chairman Chris Rollitt said in a statement to Hamilton News: "Regrettably, due to administrative issues Hamilton City Council has declined our event application and it will not be going ahead on Sunday."

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He said the trust was told it had used the wrong form for its application.

"We used the form we have always used in the past, but it appears different forms are now required, Mr Rollitt said.

He said the same information was required just on a different form.

While obviously very frustrated by the turn of events, Mr Rollitt was philosophical saying he appreciated that rules were the rules and there were health and safety and food safety issues involved.

A council spokesperson said the trust applied for a permit on the correct form only two days ago and the council had insufficient time to process it.

"The council requires 20 working days to permit an event, or 10 if a low impact event – but this event had food vendors, market stalls etc," the spokesperson said.

The festival would have included market stalls, live music and cultural acts. Fun and games for children are also a feature of the free, family friendly event.

Steele Park, previously known as Sydney Square, has been a community focal point for more than 150 years.

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It is close to the place on the Waikato River where the first contingent of European settlers stepped ashore from a paddle steamer in 1864.

It is hoped that the festival may be rescheduled for later in the year.