It was going to be a "lovely party" for 100,000 people but at 6am on Saturday, Kate Burke and Hans Heumann, made the heart-breaking decision to cancel the 21st Grey Lynn festival.

Heavy rain had fallen through the night and thunderstorms were forecast when the husband and wife team dashed the hopes of hundreds of stallholders, many of whom had worked for months to prepare for the festival at Grey Lynn park.

Under a contract with the Auckland City Council, the trust was liable for damage to the park's sports fields.

The trustees of the not-for-profit Grey Lynn Park Festival Trust Board last night were as gutted as stallholders and the public, and held out little hope of rescheduling the festival.

Kate Burke said it would cost $70,000 to $80,000 to organise another festival. The festival is funded by stallholders, who pay between $150 and $250, and a $25,000 sponsorship arrangement with the council.

The trust had to pay for three music stages and sets of sound equipment, toilets, regulatory and other costs and was unable to provide refunds, she said.

"If we had gone ahead with the weather forecast and the fields were churned up the council could have said 'here's a $15,000 bill' ... We couldn't pay that'," said Kate Burke.

"It rained all night. The ground was soggy and we had hundreds of vehicles and thousands of people to come on it. It was going to be a mud bath. We were all ready for a lovely, lovely party."

Stallholders had mixed feelings about the cancellation.

Rebecca Mooney, who had driven up from New Plymouth, understood the need to cancel the festival but vowed to return next year.

Andrew Turner, who had a clothing stall, said when he turned up at 7am some people were in tears at being turned away.

The storm pushed a yacht up on Waiake Beach on the North Shore and dumped hailstones the size of grapes on Kaiwaka.

Kaiwaka chief fire officer John Bowmar said the storm hit about 10am and lasted 45 minutes.