The "Shrooms", understood to have been slashed, are fixable and are fully insured by the artist, so there will be no financial implications for council.
There have been no other issues or damage to the Shrooms or the other pop-up art installation "UV Spaghetti" in Albert Square since they have been put up, Hosford said.
Both installations are robust, intended for interaction and play, meaning that the "Shrooms" even withstood the severe storm that swept through Hastings last week with only minor damage.
Hastings Mayor Sandra Hazlehurst said it was really disappointing, because the Shrooms had been a great drawcard for the community, but it will not deter the council from future projects that "bring our Hastings city alive".
Monitoring of CCTV cameras showed approximately 500 people of all ages visiting each installation every day and night, Hazlehurst said.
The Library and Art Gallery have been running reading and art sessions under the Shrooms and last Saturday night over 1000 people visited Albert Square for fluorescent face painting and to listen to a DJ playing at the UV Spaghetti.
UV Spaghetti will remain in place until Friday morning.