The government is in talks with hoteliers who stand to lose out after the cancellation of Rally Isle of Man.

They and hundreds of visitors could be left out of pocket with the bombshell last-minute cancellation of Rally IoM.

Organisers announced on Sunday that they had been left with no option but to pull the plug - less than a fortnight before it was due to be staged.

They blamed ’insurmountable delays’ in securing the necessary Road Closure Order from the Department of Infrastructure.

Some 800 people, travelling from as far afield as Japan, had booked to attend this year’s event scheduled for September 13 to 15.

Rally organisers have promised a full entry fee refund.

But questions are being asked about whether visitors and hoteliers will be compensated for cancelled bookings.

Sean Robertson, who had paid £254 to travel over by ferry from Liverpool as a radio operator for the rally, said: ’This decision damages the reputation of the Isle of Man as I fear competitors, volunteers and spectators will be loath to book for future events at the risk of losing money again.

’We need transparency from both sides to explain what has gone wrong.’

Sean added: ’Luckily with my sister living on the island my accommodation is taken care of so my major spending is on ferry fares, fuel, and food and entertainment expenses.

’As motorsports are my passion these costs, in excess of £2,000 per year, are a necessary outlay. Others have to pay out a lot more than me, some in getting cars shipped in from Europe and beyond.’

Rob Callister MHK, political member at the Department for Enterprise with responsibility for tourism and motorsport, said: ’We are in talks with the hoteliers, event organisers and the Steam Packet to establish the numbers involved and the impact on the tourism sector.’

In a statement, the Department of Infrastructure blamed the rally’s ’poor organisation’ and failure to meet deadlines to submit paperwork.

It said: ’Despite repeated opportunities Rally IoM missed all of the original deadlines for its paperwork and indeed the extended deadlines.

’As a result of Rally Isle of Man’s longstanding poor organisation, government officers were not confident that the rally would be run safely and competently.’

It is understood that organisers had still not submitted schedules for road closures, prohibited areas or designated spectator areas, or provided stage specific risk assessments by the end of August.

Problems first surfaced in July when the government threatened to pull the plug over safety concerns.

An emergency motion tabled to Tynwald was withdrawn after rally organisers arranged to meet the DoI to address the concerns.

Following that meeting, the rally was given an 11th-hour reprieve so long as a series of conditions for the safe running of the rally was met - including that a new leadership team was put in place.

Confidential documents released under Freedom of Information, showed that there had been safety concerns about the event going back to 2013.

Rally organisers insist that the event is safe - and the sport’s governing bodies wouldn’t give it a permit if it wasn’t.

Cancellation of the event was announced on Sunday afternoon on Rally IoM’s Facebook page.

It said: ’It is with great regret that the organisers have been left with no option but to cancel this year’s event.

’Despite enormous efforts by the vastly experienced organising team, there have been insurmountable delays in securing the necessary road closure order.

’Organisers can only apologise for any inconvenience this unavoidable decision will cause.’

It said organisers were determined to ’bounce back from this setback’ and a date for the next Rally had already been confirmed for September 12-14 next year.

Entry fees, ranging from £500 to £1,200, will be refunded in full.

Rally IoM chairman John Gill said: ’Rallying by its very nature is dangerous. We take safety very seriously.’

He said the event’s track record spoke for itself with just two fatalities in its 50-year history.

He said that the issuing of a road closure order had always been up to the wire but in previous years it had never been in any doubt.

This year there was no such guarantee and the DoI were ’still asking us to make alterations’, claimed Mr Gill. Those changes included the scrapping of the iconic Promenades stage, due to concerns over traffic backlog.

Mr Gill said the uncertainty surrounding this year’s event had led to an issue with low entries.

To break even the event needs 110 entries. By close of entries last week there were 114 entries but only 83 of those had paid.

Mr Gill said: ’We did try but we got to the point where we could not carry on without guarantees.’

Mr Callister MHK revealed that his department had offered to underwrite the event.

He said: ’We are deeply disappointed that the organisers have taken this decision, especially at this late stage.

’It is a privately-organised event and the department has offered help at various stages, including financial support.’

Confidential minutes of debrief meetings, released under Freedom of Information legislation, reveal there had been ’numerous’ complaints from the public and some local authorities were now opposed to future road closures.

The lead-up to the 2017 rally had been ’very problematic and frustrating’ because of the organisers’ failure to provide appropriate information on time.

Details of the conditions requested by government following the review meeting in July have now also been released following a second FoI request.

Director of highway services Jeff Robinson said in his letter to organisers: ’It was, I believe, accepted by Rally Isle of Man at the meeting that the department had reasonable and understandable concerns surrounding the safety and conduct of events in recent years.’

He said assurances had been given that the 2018 rally would be ’completely different to previous years, both in leadership personnel and culture’.

The DoI spokesman said: ’Ultimately this is a private event and it is for the organisers to make the decision on its future. The DoI will continue to support any motorsport organiser that can show a clear commitment to ensuring the safety of the public and to minimise the impact of their plans on residents and road users.

’The next event will be the Manx Auto Sport rally in November.’

BRC championship manager Iain Campbell said: ’From a British Rally Championship perspective, we are naturally, incredibly disappointed that the event has been cancelled.

’We appreciate the monumental work put in by the event team to try and make the rally happen.’