Navratri is a major festival in the Hindu calendar and Rushey Mead secondary school agreed to host the festival of prayers and dancing, the biggest in the Midlands, on its playing fields, starting on October 10.
But when Rushey Mead changed its mind, the festival organisers retained a firm of solicitors claiming their carefully-laid plans were in ruins.
They have informed the school there is a serious breach of contract and will be seeking damages of at least six figures.
This has been strongly denied by the school governors who have put the matter in the hands of Leicester City Council's legal officers. Some 90 per cent of the school's 1,240 pupils are Asian. Many of the school's parents were expected to attend the festival.
Spearing Waite, the solicitors representing the Navratri organisers, say they had placed extensive national and local advertising, and had booked a wide range of international artists to appear, including high-profile Asian entertainers.
Marquees, security and catering had been organised and 4,000 tickets sold at pound;10 each, they claim, when Rushey Mead told them the event was off.
"If a breach of contract results in the cancellation of the festival then our clients estimate that their losses will be well in excess of pound;100,000," said Jonathan Wheeler of Spearing Waite.
The school's reply is that the organisers were very quickly informed that the agreement to use their school fields had been withdrawn.
The head of Rushey Mead, Steve White, would not comment, and has referred the issue to the local authority - which has so far refused to say why the event was cancelled.
Anthony Cross, the assistant head of legal services at the council, said: "I am being instructed by the governing body of Rushey Mead school, and as a result of this I am taking Counsel's advice. I am in correspondence with the parties concerned."
Leicester has the largest Asian population per head of any British city.