Popular short film festival Tropfest has been cancelled after 23 years with founder John Polson saying it may be due to a “terrible and irresponsible mismanagement” of funds.

Billed as the world’s largest festival of its kind, Tropfest attracts hundreds of entries and is watched by thousands every year and was due to take place on December 6.

“It is devastating for me to announce today that Tropfest will not be taking place as scheduled in [Sydney’s] Centennial Park this year,” founder and director John Polson said in a statement.

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“In the past week or so, I have been made aware that the company contracted to raise the funding and administer the Tropfest event is unable to move forward for financial reasons.

Tropfest 2008 winner Michelle Lehman, left, stands alongside Australian actor Geoffrey Rush. Photo: ABC

“Despite a challenging sponsorship climate, Tropfest has done reasonably well in attracting support this year; however, to my great surprise, the management company has informed us that it is unable to proceed.”

Polson said it went without saying that the announcement was “the most difficult one I’ve made in Tropfest’s 23-year history”.

“My heart goes out to this year’s 16 filmmaking finalists, to our incredible list of sponsors and partners, and of course to our loyal and beloved audience,” he said.

“It is too early to tell what has actually happened here, although it is hard to avoid concluding there has been a terrible and irresponsible mismanagement of Tropfest funds.

“I and others will be spending the coming weeks and months investigating what has transpired.

“In the meantime, I ask all of Tropfest’s many supporters to bear with us while we figure out how we can rebound from this disaster. Now, more than ever, this unique Australian cultural event needs your patience and support.”

Tropfest began with organised screenings at Sydney’s Tropicana cafe in 1993, and has since expanded to North America, the Middle East, New Zealand and South-East Asia.

Genevieve Clay-Smith, who won Tropfest in 2009 with her film be My Brother said it was “horrible” to see the cancellation of the event that launched her career.

“It’s a great platform for filmmakers to show their work, to have an audience of 100,000 and I really feel for the filmmakers that are going to be missing out on that this year,” Clay-Smith said.

“Hopefully John Polson would be thinking of ways to help those filmmakers to get their film out there and also to be supporting whatever decision they want to make in order for their film to be seen.”