Spain's world-famous Pamplona bullfighting festival is in danger of being overshadowed by a crisis in the sport.

A proposed regional bullfighting ban is combining with grim economic times to send a chill through the national pastime.

From today for a week Pamplona's historic old quarter comes under the international spotlight with its bullfights preceded by thousands of thrillseekers chased by bulls that invariably end up goring some people on cobblestoned streets en route to bloody deaths in the ring.

But across Spain, the number of bullfights has dropped from about 1,000 in 2008 to a projected 800 or less this year, as local governments that have always subsidised small-town bullfights cut budgets because of declining tax revenue.

Bullfights, or corridas in Spanish, have become a luxury when cuts must be made by town councils to maintain funding for schools, social programmes and road repairs.

Making matters worse for bullfighting aficionados, the vast northeastern Catalonia region where more than 10 per cent of Spain's 46 million people live could wind up without bullfights when provincial politicians vote on a proposed ban later this month.

That would shut down Catalonia's last bullring in the city of Barcelona, although it would not ban other bull spectacles like "correbou", where people chase bulls through the streets and "bouembolat", where bulls are forced to run around with flaming wax balls on their horns.

Animal rights activists say the spectacles are one of the planet's most blatant forms of animal cruelty. They hope a ban in Catalonia nine years after the Canary Islands enacted a similar one could prompt other Spanish regions to follow suit.

"It would be a huge step forward, Catalonia telling Spain and the rest of the world that they are not for torturing animals," Mimi Bekhechi, special projects manager and anti-bullfighting campaigner for People for the Ethical Treatment of Animals.

Bullfight defenders insist the tradition is still so strong that bans are unthinkable across the rest of Spain. They concede, however, that the country's debt woes coupled with 20 per cent unemployment and government austerity spending cuts could keep down the number of small town corridas for years.

In Pamplona, the crisis is expected to take a toll for tourism and non-stop street parties during its weeklong festival of bullfighting made famous by Ernest Hemingway's novel The Sun Also Rises.

Hotels used to sell out three to four months before the event - but not this year.

"You can still find good quality rooms going for around €100 and vacancies even in some top class hotels, something unheard of four years ago," Nacho Calvo of the Navarra Restaurant and Hotel Association.