It has a name that was famous long ago. Stephen Leacock called his thinly fictionalized Orillia, Ont., "Mariposa" in his 1912 classic, Sunshine Sketches of a little Town. Then the folk festival that began in Orillia in 1961 borrowed the name and grew into one of the country's most enduring symbols of the sixties. But recent turbulence led many to believe the festival would not - indeed, should not - survive.

The Mariposa Folk Festival, however, has defied the skeptics. Early next month, it will celebrate its 40th anniversary by returning to the place where it all began for a three-day festival headlined by hometown boy Gordon Lightfoot.

In its heyday, Mariposa crystallized the hopes of the folk-protest movement and catapulted singers such as Joni Mitchell, Bruce Cockburn, the McGarrigle Sisters, James Taylor and Leonard Cohen into the limelight. Joan Baez appeared more than once, and even Bob Dylan showed up, in 1972 attending as a member of the audience with Lightfoot.

But increasingly over the past 20 years, Mariposa has struggled with the lack of a permanent home, dwindling attendance and steep financial losses. It has also faced competition from younger events it helped spawn, including high-profile folk festivals in Winnipeg and Edmonton, and summer-long concerts at Toronto's Harbourfront.

At one time, its name evoked a world of wood smoke, co-operation, antimaterialism, Cowichan sweaters and weathered jeans. But as times changed and festivals such as Edmonton's started to put electric guitars and synthesizers on stage, the Mariposa ethos began to look a little anachronistic. Even some once-committed supporters started saying the festival should be allowed to die with dignity.

But a core of devotees refused to give up, and it looks as if their perseverance might be paying off. After its initial three years in Orillia, local politicians ran the festival out of town because its success brought even bigger and rowdier crowds. (Ten thousand people descended on the town for the 1963 festival, doubling Orillia's population.)

But now, decades later, a consortium of Orillia politicians and businesspeople has approached the Mariposa Folk Foundation to bring it back to their town in cottage country, about an hour north of Toronto. The group called Festival Orillia, which is organizing this year's event in conjunction with the folk foundation, has been able to attract significant corporate and government sponsorship - good news for a festival that almost drowned in red ink many times.

"It's like the old days," says Randi Fratkin, a 10-year Mariposa veteran and chairman of this year's artistic committee. "It feels good to be a big festival again, and we hope Orillia will be its permanent home." She concedes it's a coup to have landed Lightfoot, who first played Mariposa in 1962, when he was only 22. "When artists hear Gordon is involved, it gives us instant credibility. It's a nice package with the 40th anniversary and the return to Orillia. A lot of artists want to be part of that.

One first-time Mariposa performer who is already generating a distinct buzz is Stacey Earle, who has been called "the best back-porch discovery since Dolly Parton tumbled out of the Appalachians." The 26 acts, to perform on five stages set up on the shores of Lake Couchiching, cover the range one might expect from a folk festival: from the acoustic blues of Chris Smither to the bluegrass of Heartbreak Hill, from the satiric songwriting of Moxy Früvous to the traditional Quebec fiddling of Entourloupe.

But not everyone is convinced this lineup can give Mariposa back its lustre. Generally, the strength of a folk festival lies in its links in the community. Mariposa's enduring problem has been its inability to put down geographic roots. It has meandered from place to place, including stints in Caledon, the Toronto Islands, Barrie's Molson Park and, most recently, the Ontario towns of Cobourg and Bracebridge.

"Folk music is about identity. And I don't know what Mariposa's identity is," says Gary Cristall, a former Canada Council music officer now writing a book about this genre, who was himself a driving force behind the Vancouver Folk Music Festival. He isn't sure the 40th Mariposa - featuring performers from 1961 such as The Travellers and Oscar Brand - can open up folk music to a younger generation, something he sees other festivals do so well. He recalls a recent edition of the Winnipeg Folk Festival: "It was packed to the rafters with tattoo-covered kids - with holes in places God hadn't put them - in danger of spraining their ankles learning traditional Irish dancing."

This passing of the torch is vital for folk music, says Estelle Klein, who was artistic director of Mariposa at the height of its success. She believes it's essential for the festival to bring in artists not normally associated with the folk movement, such as rappers. "It distresses me to go to folk festivals and see so much grey hair. Folk music needs a mix of audiences. If there's no mix, it's dying," she says.

Klein feels Mariposa's biggest problem is that it appears to have been kept alive by well-meaning people acting out of nostalgia. "The root of the problem is a lack of continuity. A lot of them like the idea of a folk festival without sensing what it means," she says.

But those who have devoted a good part of their lives to Mariposa are convinced the continuity is there. "Mariposa's been the single thread running throughout my adult life," says Bob Stevens, a foundation board member who first volunteered at the festival in 1965 and has been hooked ever since. He jokes that friends dismiss his tendency to distraction at this time of year by saying: "You know Bob. He's in Mariposa mode." Stevens struggles to find words to explain the Mariposa mystique. "Once you get it in your blood, you can't get it out," he says.

The Mariposa name also has resonance for a younger group, committed to finding ways to give the festival new relevance. Mark Crowe is the driving force behind Mariposa in the City, a free, one-day festival - now in its third year - that takes place this weekend in Toronto's Parkdale neighbourhood. With a largely separate lineup from Orillia - ranging from calypso to fiddling - it's an event in its own right. More than 5,000 people attended last year.

"We can definitely use the authority the Mariposa name commands," says Crowe, a carpenter and chairman of the Parkdale Business Improvement Association, which picks up the more-than-$20,000 tab for the event.

Like Mariposa, Parkdale has long battled an identity crisis. A mixed community on the western edge of downtown, its low rents attract a high percentage of artists and immigrants. But there's also a persistent corps of drug dealers and prostitutes that gives the area a bad name, something Crowe feels Mariposa in the City can help dispel. "I'm nog saying I don't hear the criticism about Mariposa, but the name still has a special magic."

That magic hasn't endured for Klein, who isn't sure if she'll make it to Orillia this year. This is partly because of the difficulty of getting there from the small town where she now lives. But the decision is also motivated by her attitude towards life in general: "I don't like sentimentality. I'm not given to nostalgia. I take what's important from the past and move on."

The passionate folk over at the Mariposa Folk Foundation and the townsfolk in Orillia have a lot invested in the belief that this year's festival will do just that.

Mariposa in the City takes place this Saturday from noon to 9 p.m. in Toronto's Cowan-Masaryk Park. Call 416-588-FOLK. The Mariposa Folk Festival is set for July 7-9 at Tudhope Park in Orillia. Information at www.mariposafolkfestival.com or call 1-877-504-4415.