Ballina Town Council is refusing to make its annual contribution payment of €6,500 to Ireland West Tourism because it encourages short holiday breaks to Galway city and Westport only.
It says Ireland West's marketing policy for the UK has made no mention of the other towns in the region it represents in Cos Mayo and Galway.
Fianna Fáil councillor on Ballina town council, Mr Pádraig Moore, says he discovered this policy of Ireland West on the organisation's website.
"I was shocked to read the organisation is encouraging short holiday breaks to Galway city and Westport using Galway and Knock airports as access points, with no mention of the other towns in the region.
"Ballina and Castlebar town council make annual contributions to Ireland West also and why should we pay to encourage tourism exclusively to one town in this county, Westport?
"Good luck to Westport if it can get this important tourist market but Ballina won't be paying towards that kind of marketing," he said.
Ballina town councillors backed the view of councillor Moore and agreed to discontinue funding Ireland West unless an adequate explanation was forthcoming from the organisation as to its stated policy.
Ireland West spokesperson for Co Mayo and senior tourism officer, Mr Brian Quinn, said in response that he regretted the decision and described it as both "inopportune and ill-advised".
In a statement Mr Quinn said Cllr Moore's quote from the organisation's website was taken out of context and referred only to the short break market.
"The short break market is only one segment of our marketing strategy for the region. Others, such as coach and caravan holidays and activity breaks, are well established in Ballina."