Greens Senator Peter Whish-Wilson, a 10 year stall holder veteran with his own wine business, suggested the festival revisit its roots in order to abide by the COVID event stipulations thrust upon it.

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"They should think about holding a retro Festivale," he said.

"They could have a really intimate, boutique festival like it used to be."

Mr Whish-Wilson said the COVID impact could end up being a blessing in disguise for an event that had changed significantly over its lifetime on the Launceston calendar.

Prior to it being announced the event was in danger next year, about 60 stalls were slated to grace City Park.

But for a boutique event, Mr Whish-Wilson suggested that number would be much lower, and to avoid any bad blood from stallholders missing out, a lottery could be held to decide who could get in on the action.

"There could be all local producers of wine and food," he said.

With concerns over the financial viability of the event for both organisers and stallholders, Mr Whish-Wilson said the state government could front up the cost of holding Festivale.

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Organisers came out on Tuesday and said they had been unable develop a COVID safe event plan that would allow 10,000 attendees, and instead they could only cater for 5000.

Mr Whish-Wilson said the 5000 figure could end up working to the festival's advantage if it sold individual daily tickets.

He said harking back to the early days of Festivale could offer punters the chance to vote with their feet with regard to what kind of future they see for the event - be it large scale, or more retro.

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