PLANS for the return of one of the most popular parts of last year's Edinburgh Fringe are in doubt as traders claim it could cost them thousands of pounds in lost business at one of their busiest times of the year.

Edinburgh summer street party organisers have clashed with pubs, clubs and shops over plans to close bustling city centre thoroughfare George Street for a month to create the Spiegelterrace for festival revellers.

The first street closure in 2012 was orchestrated by comedy entrepreneur Tommy Sheppard's Salt'n'Sauce Productions, and he said he has been in talks with businesses about its return for months.

The main issue is the siting of The Famous Spiegeltent, with some wanting to push that aspect of the venture out of the street. The council is now planning to consider alternative proposals at a special meeting from firms who lost out last year.

The Spiegeltent, a major fixture at Fringe locations across the city since 1985, is both a venue and a bar and the key feature of the pedestrianised terrace in front of the Assembly Rooms, which was fenced off last year.

Mr Sheppard, who is behind comedy club The Stand and was appointed as Assembly Rooms Fringe director last year, insisted this time the show will again be a "must-visit".

He has already booked in Motown legend Martha Reeves for the party this summer.

While firms said they agreed with some form of terrace in principle and accepted the first street party was an overall success, it is feared a similar plan would lead to more losses in income. The road was shut between Hanover Street and Frederick Street last year with plans for the same this August.

Firms connected to the George Street Association suggested placing the Spiegeltent in St Andrew Square at the end of the road as an alternative proposal, while the Essential Edinburgh business organisation was "concerned a precedent was being set", according to council papers. The council is due to consider a recommendation to approve a traffic-regulations order that would allow closure.

Andy Neal, of Essential Edinburgh, said the downturn last summer was due to "lack of access to parking, unfair competition and the frontage of some businesses being blocked off".

Mr Sheppard said factors at play that could have affected the downturn last time were the Olympics, the recession and the relatively good weather.

He said: "Last year's event was a tremendous success enjoyed by several hundred thousand people. We want to build on that success and continue to build a must-visit festival hub right in the heart of the city."

Josh Miller, chairman of the George Street Association, said that to have a downturn during one of the busiest times of the year was unfair, adding "the event should attract people and benefit all businesses in George Street".

Mark Turley, council head of community services, said if new plans are submitted a special meeting could be called to consider them.