The two-day event scheduled for Glasgow's Thistle Hotel was called off even as some exhibitors began to set up their stalls, as The Herald revealed on Saturday.
It was billed as part of VisitScotland's Homecoming 2014 series of events, which also includes the 700th anniversary of the Battle of Bannockburn, the Hebridean Celtic Festival and Glasgow Comic Con.
The International Tartan Festival was promoted on VisitScotland's website but did not receive any public funding. A Homecoming Scotland 2014 spokeswoman said: "It is unfortunate that the organiser has decided not to go ahead with the proposed International Tartan Festival event.
"The event was part of our Homecoming Partner Event Programme, where events do not receive direct funding but can benefit from the overall marketing and promotion of the Year of Homecoming celebrations, which present a year-long, packed programme of over 970 unmissable events across the whole of Scotland."
Event organiser Azra Mansha said she would help exhibitors who were left out of pocket by cancellation of the weekend event but said those who had already pulled out would not get their money back.
"I've worked really hard for the last 18 months on this," she said. "I'm heartbroken at what has happened."