Shona McCarthy, chief executive of the Edinburgh Festival Fringe Society, urged ministers to drop the current two-metre rule for venues to the one-metre rule used in hospitality.
She said if this does not change, it places the future of the 75-year-old festival under threat.
Ms McCarthy told The Times Scotland: “Within another two weeks, it’s going to be impossible for any [Edinburgh promoter] to put on anything.
“There’s a real danger for the future of the Fringe. One year of no festival was manageable, and we were able to keep it in hearts and minds and everybody still held that space in their calendar, as that annual moment for reconnection and getting together. At two years, you jeopardise the solid space the Fringe has held for 75 years.
“This is a moment when we’re really looking to the Scottish Government to have that leap of faith and trust Fringe operators in the same way as they are trusting the hospitality sector to deliver services safely to the public.”
The Edinburgh Festival Fringe was cancelled for the first time in its history last year due to the coronavirus pandemic.
Show registration for both online and in-person performances opened earlier this month for this year’s Fringe which is taking place from August 6 to August 30 this year.
A Scottish Government spokeswoman said: “We do not underestimate the severe impact this pandemic has had on the performing arts. We want the performing arts sector to be able to reopen fully and plan future activity with confidence, but we must continue to move very carefully to ensure continued suppression of Covid-19.
“In Level 2, indoor events in settings such as theatres, concert halls, music venues and comedy clubs are permitted with a maximum of 100 people subject to physical distancing measures.
“Guidance is being produced which may allow higher capacities to be agreed with the local authority or the Scottish Government, depending on the event and the setting’s ability to safely hold larger numbers.
“We are reviewing physical distancing, and an announcement of the outcome of this review is due ahead of the planned move to Level 1 on 7 June. Physical distancing has been an important tool for controlling the virus but, as with all restrictions, we will only have this in place as long as is necessary.”