Carnival groups have vowed to take to the streets next year, despite threats their annual party may be cancelled.
Council chiefs have said they may withdraw support for next year's Notting Hill Carnival unless dramatic changes are made to its organisation.
They criticised the 'profound organ-isational failure' of this year's event, which ended with a large rioting mob pelting police officers with bottles.
Debi Gardner, of Mangrove Steel Band, said: "Most carnival groups in London would say the same thing, that they would still go even if the councils take away their support.
"It would be such a shame to lose that support, but hopefully the authorities will work with us.
"Our group is based at the heart of the carnival, and we want to deliver a safe event. We hope everyone involved would come together so it's as safe as it can be. Everything can always be improved, but it will cost money."
Pepe Francis, of Ebony Steel Pan Band, added: "Carnival means everything to us. We've been going for 40 years, and we're not going to stop now."
An action plan has been issued to organisers Notting Hill Carnival Ltd (NHCL) by Kensington and Chelsea Council, with the support of Westminster Council, which must be put in place if next year's event is to be saved.
Cllr Merrick Cockell, Kensington and Chelsea Council's leader, said this year's carnival failed to achieve 'basic event management standards'.
He added: "We cannot allow hundreds of thousands of people to come along to an event when we know it hasn't been properly organised.
"We need urgent and fundamental change from the organisers. Work simply must start now."
Westminster Council's cabinet member for community protection Cllr Daniel Astaire said: "We're fully supportive of the approach adopted by Kensington and Chelsea, the police and the GLA. We're liaising with them and carnival organisers to discuss the important issues raised."
Recommendations include holding regular meetings with residents, ensuring NHCL works with the councils and police and deploying a significant number of stewards to manage the route.
NHCL company secretary Chris Boothman said: "Carnival has now become a complicated event which is attended by many thousands of people and the organisation has not developed in line with its size.
"I believe the committee will pull together and make the changes that need to be made."