A 6ft bonfire was dismantled by a council after officials found that the organisers had failed to apply for a temporary events licence.
The bonfire has taken place on the recreation ground in Lower Hartshay, near Ripley, for more than 20 years and residents say it is an important opportunity for families to get together.
However, after Amber Valley Borough Council responded to a fly-tipping complaint, they also realised that there was no licence for the event and left a warning sign at the scene which stated "we are watching you".
Villager David Crowder said villagers had never asked the council for permission because they "never felt they needed to". He added, "I've been in the village for 29 years and every year we build a bonfire. It's just garden waste and hedge-cuttings. You've only got to look at the ground to see there's a scorch mark, so the council must be aware it happens."
Sandra Starkey, 53, said collecting the wood for the fire was all part of the village's tradition. She commented, "It seems that, this year, without any prior word or discussion, an excellent and long-standing social event, where villagers in their busy lives can, for one evening, get together and relax and catch up has been spoilt".
In the end, about 30 people turned out for a party on the recreation ground on Saturday night with a small number of fireworks and sparklers.
A spokesperson for Amber Valley Borough council said today that the removal of the bonfire was "standard practice as there had been no application for an event licence".
