The wrangle over Southwold's annual Christmas lights switch-on took a new twist this week when it was revealed an event would go ahead this year – but on a much smaller scale.

The town council has teamed up with Southwold Chamber of Trade and Adnams in a bid to salvage the traditional festive event, which attracted a record turn-out of 2,000 people last year.

It comes after a row erupted in March when the committee behind Switch on Southwold came under criticism from some members of Southwold Town Council amid claims that they had gone over budget, not cleared up properly and allowed the celebration to grow too big for the town.

The organisers angrily denied the accusations and took the decision to dissolve the committee and abandon their plans for December 2012.

The move prompted concerns throughout the town, with some traders fearing that they could lose vital business during the busy festive season.

But the mayor of Southwold, Michael Ladd, confirmed this week that an event would go ahead in December, although it would be a 'low key' occasion.

Mr Ladd said discussions were still ongoing and no plans had been finalised. He was also quick to play down any suggestion that the event would resemble the switch-ons in recent years, as they would be putting it on with a budget about half the size.

He said: 'I have agreed to project manage the Christmas lights event this year alongside Adnams and the chamber of trade. There will be a new project team of about six people, but we are quite short of time and funds, so it is going to be a fairly low key event.

'However, there is something about bringing it back to its basics that makes it more community based. We want local organisations to get involved and take some ownership over it – but we are trying to manage people's expectations.'

The last switch-on event committee, which had eight members, formed in 2003 when the previous volunteers resigned. In its first year it arranged for the car from Chitty Chitty Bang Bang to drive Santa Claus up the High Street.

But last year's event was hailed as its biggest success when James Bolam and his wife Susan Jameson – who star in the CBeebies show Grandpa in My Pocket which is partly set in Southwold – switched on the lights.

The event made �13,000 from sponsorship and raised extra revenue through Easter egg hunts, cake sales and quiz nights. The main event on December 2 also featured local choirs.

It was believed organisers were planning a more traditional Christmas lights event with a Victorian theme for this December before the committee decided to disband.

Guy Mitchell, the chairman of Southwold and District Chamber of Trade, said: 'Christmas lights is always a big event that is enjoyed by many people. We demonstrated with the Queen's Diamond Jubilee celebrations that the town can have an amazing day with people enjoying themselves, and we hope people will turn out for the Tour of Britain as well.

'We worked closely with the town council on the Costa Coffee decision, and the chamber of trade have always wanted together with the council for the benefit of the town.'

An Adnams spokesman said: 'Adnams is delighted to sponsor the Southwold Christmas Lights again this year. We have increased our support and have a team in place who are working with the town council, chamber of trade and local community to ensure that Switch On night is a firm fixture on the calendar.'