All Points East will be allowed to significantly increase its capacity so Tower Hamlets Council can retain its contract with the festival provider.

The 10-day festival, which takes place in Victoria Park, can currently sell tickets to 40,000 music fans on six days.

It also runs free community events with a capacity for between 5,000 and 15,000.

Tower Hamlets’ cabinet this week signed off plans to increase capacity to 50,000 people on each of the six major event days.

However, organiser AEG Presents has told the council it will only sell the higher number of tickets on four.

AEG signed a four-year contract with the town hall to use the park in 2017.

Artists such as Nick Cave, The Strokes and The Chemical Brothers have headlined in recent years. The 2020 event last May was cancelled because of the pandemic.

Now AEG is asking for a reduction in fees, which were not disclosed by the council, the option to extend the contract by a further year to 2023 and an increased capacity “to be more competitive in their ability to secure artists”.

The new terms will see the organisers pay an undisclosed sum towards any events cancelled because of the pandemic.

Mayor John Biggs said new capacity number could be “revised down” if it proved unmanageable

“The anxiety might be that we are creating a position in which possibly under AEG or a future contractor where we would have 10 large events on consecutive nights,” he said.

He added: “It is a competitive market place and there are other borough’s with open spaces and venues which might make offers so we need to be commercially minded but also protective of our community interests.”

Cllr Val Whitehead said she was “disappointed” the plans had not been put to consultation with residents.

She added: “I have expressed some concerns about that but accept that under the circumstances and to retain the contract with AEG that was the right this to do.”

The terms will still have to be signed off by the borough’s licensing committee before the event can go ahead.