Brian Dunsby, who helped create the traditional market on Montpellier Hill in 2012, made the claim after being refused a licence by the council which has now begun talks with a Manchester-based firm over bringing a new event to the town this December.
Mr Dunsby said in a statement: “We have tried to engage with Harrogate Council in positive discussions, but in recent weeks it has become clear that they have their own agenda. This has now been revealed.
“Despite Brexit, their new market will provide only 45 stalls mostly from European countries. Local traders will probably not get much of a look in.”
Last week, Market Place Europe announced it had begun talks with the council over hosting a new nine-day event between 3 and 12 December.
This was after the council last month said it had refused to licence the Montpellier Hill event because it had “outgrown what can be safely delivered” at that location.
The council also said an event management plan from Mr Dunsby and colleagues “did not fully take into account” the risk of overcrowding, evacuation procedures, counter-terrorism measures and the ongoing risk of Covid.
Mr Dunsby said he was left “extremely saddened” by the decision which he added was made despite his best efforts to resolve the issues.
He said: “We realise that the council leaders want us to relocate elsewhere, but we cannot find anywhere else suitable - and there is insufficient time to rearrange the large number of details involved.
“We now have 172 market traders' applications waiting for acceptance whilst there are already 55 coaches planning to come to Harrogate during the market.”
Mr Dunsby added: “We have been pleased to provide Harrogate with a successful Christmas market for eight years, with local traders, local products and supporting many local charities.
“Over the past five years we have contributed over £90,000 to local charities and similar organisations. The peak attendance was over 85,000 visitors during our four open days.
“We want to thank you for all your support and encouragement over the past eight years. We have enjoyed working with you and are extremely saddened at this unfortunate outcome.”
The location of the proposed event from Market Place Europe has yet to be confirmed and would require council approval.
Speaking last week, council leader Richard Cooper said: “From what I’ve seen, Market Place Europe have years of experience hosting events so I know they’ll bring an abundance of knowledge to Harrogate this Christmas.”