The loss of the two days of high-class racing which were expected to attract huge crowds will have cost York a substantial amount – no figures were being disclosed last night as the numbers of refunds will not be complete for some time – and came when the executive had shortened their season to enable a £2.5m investment in course improvements to be completed in time for the 2009 May meeting.

An inspection at noon today will determine whether it will be possible to race tomorrow and on Friday when the Group 1 Juddmonte International, which carries York's record prize-fund of £550,000, will be run just before another Group 1 contest, the £240,000 Coolmore Nunthorpe Stakes over five furlongs in which Kingsgate Native, the first two-year-old to win the race since 1992, will defend his crown.

The Juddmonte International was to have been the focal point of yesterday's racing, pitting New Approach, the Derby winner, against Duke of Marmalade, who has won four Group 1 races already this year.

Now, provided, the ground dries out, the mouth-watering meeting of two superb horses, both trained in Ireland, will hopefully provide a fitting climax to a meeting which, even over two days rather than four, will still give the Yorkshire racing public the chance to see top-quality action.

The feature of tomorrow's racing is the Group 1 Darley Yorkshire Oaks, the richest all-age mares and fillies race in Britain, while leading two-year-old fillies will contest the £100,000 Group 2 Jaguar Cars Lowther Stakes.

On Friday, in addition to the Juddmonte International and the Coolmore Nunthorpe, the card includes the £100,000 Group 3 Skybet Strensall Stakes.

The decision regarding yesterday's racing was taken by William Derby, York's chief executive and clerk of the course, following an inspection at 8.30am after 11mm of rain had fallen on ground already officially declared to be "heavy" after prolonged rain over the weekend. "It was desperately disappointing for everyone at York and I am sure for all those who had planned to be here for the first day of the Festival, but it was the only decision to make," said Derby.

His subsequent decision yesterday afternoon to abandon today's racing – which featured the Totesport Ebor, the richest Flat handicap in Europe – only deepened the gloom hanging over the sodden Knavesmire.

Staff at York had worked throughout the day under head groundsman Adrian Kay in an attempt to ensure the track would not lose the second card of their four-day meeting but their efforts proved in vain.

Derby added: "It had dried out nicely during the afternoon with some strong wind and sunshine and we were heading in the right direction.

"But when we were halfway around the course, we got an absolute soaking. The Met Office issued a severe weather warning for our area as it happened and that unfortunately put paid to tomorrow's racing.

"It's a very unsettled weather picture; there are showers around and brighter spells around so if we could have a period of consistently drying conditions we would be hopeful for Thursday. We will look again at noon and we may have to look again in the afternoon."

Racegoers who bought tickets for the first two days will not lose their money; advance booked general admission badges and tickets will be automatically refunded.