The festival, held in March each year, has expanded considerably over the last few years and now attracts more than 2,000 visitors to the town.
However, it struggles to make money due to offering access to many of its events for free, so its organisers are forced to keep asking public bodies for funding.
Hawick Reivers Association, the organisation that runs the festival, applied to Scottish Borders Council’s Teviot and Liddesdale community grant scheme for £5,000 to spend on gazebos.
The group was previously successful in landing a £5,000 grant in 2017 and used that money to buy 10 gazebos used during the festival and also loaned out to local groups for free, but it says it needs more to satisfy demand.
The association also received a grant of £3,000 from Hawick’s common good fund in December to help cover the festival’s running costs.
The application to the Teviot and Liddesdale community grant scheme was heard by members of the council’s executive committee on Tuesday, and they voted to refuse the application.
Selkirkshire councillor Gordon Edgar told the committee: “They seem to have had substantial funding from the council in the past.
“It’s in the report here that they don’t actually need the gazebos – they could make do with what they have – so I cannot see any reason for them to apply for this, and I’d move to refuse this application.”
Galashiels councillor Euan Jardine added: “It’s a very important festival, but I don’t think that the festival is going to fold.
“I don’t think the gazebos are going to fold the festival, and I think that’s an important factor here. It’s still going to go ahead, and I don’t think it’s going to make it any more successful having extra gazebos.”
That decision sparked a backlash from Hawick councillors keen to back the event.
Speaking after the meeting, Hawick and Denholm councillor Stuart Marshall said: “I am bitterly disappointed that the council’s ruling executive has thrown out this application, and I’m sure that the reivers festival committee are feeling the same.
“It’s very sad that it had to come to a committee outwith the town to decide in the first place.
“The reivers festival attracts hundreds of visitors, many staying for two nights in the town, and this year, for the first time, a large contingent of Irish visitors will be made welcome at the festival, so I was particular taken aback to witness Mark Rowley, the portfolio holder for economic development, not voting in favour of such a fantastic initiative.”
Hawick and Hermitage councillor Watson McAteer added: “I am astounded that the executive committee rejected the reivers festival bid for a £5,000 community support grant.
“This money was to help the continued development of a highly successful event that draws visitors from across the world and helps increase footfall in our high street.
“This grant is specifically targeted at the Teviot and Liddesdale area, and the net effect of this ludicrous decision is that the money will in all likelihood be returned to the council pot and spent in Gala or elsewhere in the Borders.
“This was once again an example of decision-making by councillors with little knowledge of understanding of the consequences.”
This year’s festival, the 15th, will be held from Friday, March 22, to Sunday, March 24.
Go to www.hawickreivers.com for details.