In an at times thorny debate, councillors voted to scuttle the plan by the barest possible 6-5 margin.

In his report, general manager David McGowan had recommended a trial of the $5 fee for residents this year but many councillors thought the plan would erode local support for the festival.

Corbett Gardens is council-owned land and an estimated $100,000 of council resources are donated to the gardens each year.

Former Tulip Time president Cr David Wood attacked the plan, claiming Tulip Time had deserted the ideals on which it was created.

"I reject it wholly and solely and I'm not happy with a lot of things connected with Tulip Time these days," he said. "We must subsidise them for at least $100,000 each year and I think charging residents will alienate them away from Tulip Time completely.

"They're having themselves on and this is not a fair deal at all.

"This plan is certainly not in the best interests of the district or Tulip Time."

But Tulip Time festival director Vicki Miller has refuted Cr Wood's claims, saying the decision could cost the festival up to $25,000.

"This is very, very frustrating and any money that would have gone to local community groups has now gone out the window," she said. "Other local events like Brigadoon, Exeter Fare and Bradman matches all charge locals full price and we're only proposing a reduced fee.

"Where would Bowral and the Southern Highlands be without Tulip Time- it brings 50,000 tourists into the shire and puts money into the pockets of local business owners."

Under the plan visitors fees would rise from $5 to $8.