Cambridge City Council is taking legal action to recover money owed to it by a company contracted to sell Cambridge Folk Festival tickets on the internet.
SecureTicket UK was appointed by the council in December 2007 to sell tickets online for the 2008 festival following a competitive tendering process.
A total of £618,000 from ticket sales was due to be paid to the council in August of last year but the money has still not been received.
Since August the council has made repeated attempts to get SecureTicket UK to pay.
When payment had still not been received in early October the council initiated legal proceedings in the High Court for the return of the money. This court action will be heard in the High Court on January 21.
Councillor Ian Nimmo-Smith, leader of Cambridge City Council, said: "We are taking this matter extremely seriously given the large sum of public money involved.
"This company sold folk festival tickets for us in 2007 and they did a satisfactory job. They were appointed again for last year's festival after a competitive process.
"They haven't paid up even though we have given them extra time to do so.
"Clearly we have been very badly let down and we are not going to wait any longer. That is why we are taking legal action. I am determined we do all we can to get our money back."
In a further move the council is commissioning an independent review to look at whether more could have been done to protect the council's money.
The review will also make recommendations on how the council can protect itself against similar risks in future.
A report by the council's internal auditors published on 20 November criticised some aspects of the procurement process used for suppliers of the folk festival toilets, showers and marquees.
The report, which did not look at the sale of tickets on the internet, highlights the need for improvement in a number of areas. An action plan has been drawn up to address those recommendations.
Cllr Nimmo-Smith added: "It's imperative that we do all we can to minimise the risk to public funds as well as getting value for money. This means having rigorous procedures in place that apply to the folk festival in the same way as our other services.
"There is no question that SecureTicket UK has failed to meet its contractual commitment to pay us. That much is clear.
"But I am also mindful of the findings of our internal auditors on other matters related to the folk festival. I want to know what further steps could have been taken to avoid the situation in which we now find ourselves.
"For this reason I feel it is essential that we look in detail at the situation around the online ticket sales contract.
"A full independent review is the best way to do that and when we have the findings of that review we will know what lessons need to be learnt for the future."
The council is now appointing external accountants to conduct an independent review of folk festival ticket sales on the internet.
SecureTicket UK Limited is based in Stockbridge, Hampshire.
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