A small festival in Cornwall got funding through Dragons Den.
You could get funding through Princes' Trust, from local businesses or by being sponsored by bigger brands.
I'd say the best way to start a festival is make contacts- gain work experience from people organising a festival the size of one you'd like to begin, get in touch with nearby farms/Landowners/local council to see if anyone's interested in helping.
Maybe find the runners of 3-4 local successful club nights and ask if they want to get involved, all taking charge of a different stage/tent.
Get the community involved- in return for favours you'll advertise services or promote local artists, film makers, poets, comedians etc
Bands can be expensive to hire- contact agencies and record labels- they may give a reduced rate for a big name if you agree to put a smaller artist of theirs on the bill. It's also considerably cheaper to get a band to DJ than to perform.
I think it'd be easier to organise a festival held in proper venues like Brighton's Great Escape or The Camden Crawl than in a field. Less health and safety measures and no worries of the stages not being built in time.
You'd have to also get in touch with the Police, there maybe some laws or licenses you'll need to be aware of. You'll also need a lawyer.
Good luck, start of small and if it's good it's likely to become bigger
Edited by snorky, 23 April 2009 - 05:29 PM.