The council had been planning a global PR push to promote its online Beckham Tourist Trail, a guide to the borough based on Becks's former haunts.
This was to provide welcome publicity for the borough after recent headlines.
This summer leader Tony Buckley was suspended amid criticism that the council had not done enough to improve performance.
But after talks between Becks's agents, SFX, and the council, the campaign, which had already included media coverage in South Africa and Belgium, and even pitch-side advertising at a Real Madrid game in China, has been cut.
An SFX spokesperson said its legal department was dealing with the issue but would not comment further.
A council spokeswoman stressed the site would continue, but would not be actively promoted. She said: 'SFX wasn't happy with it, so we are keeping it low key for now.'