Organisers have called off the planned National Bush Poetry Championship which was to have been held in Orange in February.

The cancellation has also meant organisers have had to give back $10,000 to Orange City Council.

Council granted organisers $12,000 in August to help fund the event. A report to council said the organisers wanted to retain $2000 for other festival events.

"In-lieu of a national championship for 2021, Banjo Paterson Committee intend to host a poetry performance competition for the Orange region primary and high schools," it said.

"They are requesting to return the majority of funds provided by the event sponsorship for the purpose of the national competition. However, they wish to retain and redistribute $2000 of the original funding to support the local activities of a youth poetry competition."

The festival is run by the Rotary Club of Orange. Secretary Len Banks told council COVID-19 restrictions had forced the event to be cancelled.

"Travel restrictions make the running of a national event problematic," he said.

"It has therefore been resolved to postpone events that require interstate travel until 2022 and only hold local events for the 2021 festival."

Mr Banks said the 2021 festival would continue with events including a school poetry recital contest at the Orange Ex-Services' Club.

"There will also be events in pubs, wineries and parks including a twilight birthday celebration of the birth of Andrew Barton Paterson on Wednesday February 17."