The Pride House event a this year’s London Olympics, designed to promote the LGBT community, has reportedly been cancelled due to a lack of funding.

An email leaked to the Streatham Guardian by the event organisers said the 18-day festival, which had been planned for Clapham Common and supported by patrons including Stephen Fry and Peter Tatchell.

The executive director of Pride House, Chad Molleken, had written: “A combination of the lack of sponsorship and headline entertainment has proven to make the event commercially unviable.

“It was not without considerable effort that we tried to make this happen.”

In January, the Friends of Clapham Common had said the event was “highly likely” to become a “magnet for undesirable elements of the gay community”, and later apologised for the comments and said they would be working with gay and trans community members to benefit the common.

Tory Councillor Shirley Cosgrave, Clapham Common councillor told the paper: “We had concerns about the financial viability of the event and hope that lessons will be learnt about the need for rigorous checking of applications before such events are given the go-ahead.”

Labour Councillor Christopher Wellbelove said: “Sadly it seems that the event has been cancelled the event on Clapham Common which is of course very disappointing for many who hoped to attend the event.

“I do hope that Pride House will exist in some form during the period at the London 2012 given it aims of raising awareness of homophobia in sport are still extremely relevant, as is having a positive representation of the LGBT community at this and future games.”

A Stonewall spokesperson said the Olympics organisers had “little, if anything, to promote or reach out to the LGBT community. There is one openly gay paralympian show jumper on team GB.”

Pride House’s executive director Chad Molleken continued: “It is with huge disappointment that due to circumstances beyond our control we have had to withdraw the license application for the Pride House Festival on Clapham Common.

“We would like to thank Lambeth Council, local businesses and the residents who have continued to support the project.

“We are currently exploring other options to ensure that Pride House is featured among the line up of proposed Olympic Houses in London this summer.”