Ignition festival, headlined by Echo & the Bunnymen, has been cancelled less than 48 hours before it was due to open in Newcastle.

The two-day festival, which was meant to promote the local musical talent of the northeast, will not go ahead after Newcastle Racecourse cancelled the event, according to Ignition's organisers.

A statement on the festival's website said: "With deepest regret we are now in a position to confirm that Ignition Festival 2011 will not be going ahead, despite every effort to keep this going after this was cancelled yesterday by Newcastle Racecourse.

"Unfortunately this was not possible due to residential issues and time constraints."

The organisers apologised to ticket holders and said they intended to reimburse them.

The statement added: "Be assured no salaries or expenses have been drawn by directors or shareholders at any time. And although this is of no compensation, all involved will be taking a large financial loss."