There is a major issue affecting festivals after 2006 which seems to have been overlooked by almost everyone, hardly surprising as it is hidden in the small print and hasn't been given any publicity by the authorities.
Anything held in non-licensed premises will need a Temporary Event Notice (TEN for short), and there is a limit of 96 hours per TEN, after which there has to be a gap of 24 hours. In other words, if the festival starts on Friday, there should be nothing in the Arena, marquees etc on Tuesday. http://www.culture.gov.uk/cgi-bin/MsmGo.exe?grab_id=43&page_id=11010560&query=TEN&hiword=TEN+
There might be a way out of this if the (East Devon??)council is enthusiastic - local authorities can licence a "public space" which could include the Knowle Arena, Ham and Blackmore Gardens. I suspect that LNE held on farmland would not benefit from this.
I have heard that Teignbridge council are looking to do this with some of their spaces such as the Triangles in Teignmouth, so it might be worth politely suggesting to East devon that they investigate a similar approach in Sidmouth.

Quote from the DCMS site---
"As stated above, local authorities will be encouraged to obtain premises licences to cover public spaces, such as village greens or indeed a number of streets, on which many performances take place. No additional licence would then need to be obtained by anyone else carrying out licensable activities on such premises covered by such a licence, although the consent of the local authority holding the licence would be required and permission given to use the land. But if there is no pre-existing licence, unless your event falls into an exempt category, a premises licence or club premises certificate or temporary event notice is required to authorise the provision of regulated entertainment."