Happing Festival will go ahead this year, and include a carnival for the first time.

And the event's new director, Avril Smith, is also hoping that there will be funding to set up an art gallery and cafe in Stalham to become the annual June-to-September festival's permanent base.

Uncertainty had surrounded the festival, now in its sixth year, because of the question mark hanging over the future of regeneration group the Stalham with Happing Partnership from which it received funding.

The partnership is among seven similar bodies in north Norfolk which will no longer receive vital cash from the second homes council tax following a decision by Conservative-controlled North Norfolk District Council to plough the money into a Big Society Fund instead.

Ms Smith said the loss had been 'quite a blow' but appeals for festival sponsorship to local businesses including Tesco and Richardson's boat yard, had been successful. The festival had also received �1,000 via the Norfolk Community Foundation and expected to hear this month about two bids totalling �11,000 to launch the cafe-gallery.

A complete festival programme was still being prepared, said Ms Smith. But definite dates book-ending the summer were folk-rockers Stone Angel, who would be performing in St Mary's Church, Stalham, on June 2, as part of the town's Queen's diamond jubilee celebrations, and poet, comic and storyteller Doreen Reed who wuld appear at Neatishead's Victory Hall on September 7.

There would also be an August bank holiday carnival on Stalham High School's field and in the sports hall. A jazz trio and classical concert were also planned in Ludham.

Ms Smith hoped that in time the gallery and cafe venue could be used to showcase a range of local dramatic, musical and other talent, offering residents and visitors year-round entertainment.

Meanwhile Eric Lindo, Happing Partnership chairman, said the partnership was at a critical stage and he expected to hear the result of bids for other sources of funding later this month.

There was enough money to keep its Happing Shop, on Stalham High Street, open until the end of April but partnership co-ordinator Michael Castle would leave at the end of this month unless the applications were successful.

Mr Castle's departure and the shop's closure would be major losses, he added. The shop was visited by more than 5,000 people a year and was also used as a base by the Citizens Advice Bureau, Norfolk Credit Union's Happing Community Bank, and Happing Writers' Group, as well as being a source of wide-ranging information and services.

The partnership's main hopes are pinned on a funding application for its proposed new social enterprise project, Happing Cares, which would see people living within the Happing Partnership area - Stalham and its 20 surrounding parishes - being trained and employed to care for local elderly and other vulnerable people in their homes.