Laughter is free – well, it is at this year's Edinburgh Fringe

A spirit of free comedy has broken out in Edinburgh as performers and festival-goers shun expensive venues in favour of free shows to reflect straitened times – without cutting back on laughs.

This month, 607 out of 2,542 shows at the Edinburgh Fringe, which began last weekend, are free of charge, the highest proportion in the festival's history.

The Free Fringe, a spin-off under the overall Fringe umbrella, has 40 per cent more participating shows than last year, as growing student debt has led to a reluctance among many performers to commit large proportions of their profits to venues.

"Smaller venues, which are lent to artists free of charge, represent a better deal for the public and artist," said Free Fringe founder Peter Buckley Hill. "It's always the case that if you have good shows at zero pounds a ticket, and good shows that cost more, people will come to the free shows. It's more in keeping with the spirit of the festival."

The Free Fringe was founded in 1996 as a counterpoint to the high hire costs charged by the city's best-known venues. Performers are typically forced to hand over 40 per cent of their box-office takings to such venues. The Free Fringe's 29 participating bars, theatres and comedy halls include central Edinburgh's the Voodoo Rooms, which has donated space free of charge. Performers are given minimal equipment, and ask punters to pay what they think the show is worth. Those appearing with the Free Fringe this year include comedians Robin Ince, Norman Lovett, Tim Key and John Hegley. The Laughing Horse Free Festival also offers free performances as part of the Fringe.

"Some of the Fringe is very slick and very high profile but it costs a lot of money to perform within it," said Edinburgh Comedy Awards founder Nica Burns. "I think the more reasonably priced parts have grown as there are huge numbers of students coming out of college with massive debts. So how do they find the money to put up huge amounts of cash? On the downside, it's much harder to do anything complicated with minimal equipment."

Ince has been performing in the Free Fringe since 2008. "I remember coming several years ago with Stewart Lee and we wondered where all the middle-aged couples with the highly-annotated programmes had gone," he said. "It dawned on us that they'd been priced out of the market. So many shows are over £10 and that's a lot if you're seeing five or six shows a day. I think £14.50 is hell of a lot for 55 minutes of comedy. And it puts pressure on you as a performer. I'm not looking for a job on television, I'm just here to try out ideas, so the Free Fringe suits me perfectly."

Best of the free Fringe

Robin Ince's Struggle for Existence, Buffs Club, Edinburgh

The former 11 O'Clock Show writer's new solo show, in which he dissects topics from apes to anger, from Charles Darwin to Schrödinger's cat.

Jollyboat, The Voodoo Rooms

Liverpudlian comedy-rockers Tom and Ed write songs about keyboard shortcuts, pirates and celebrity culture. The pair beat 65 other acts to win the Musical Comedy Awards this year.

Norman Lovett, The Canons' Gait

Lovett presents new material in support of the spirit of the Free Fringe. "It reminds me of when I first came up to do a show here in 1983 and was putting up A4 posters," he says. "Now the posters are life-size and it's all about the money. We have to change that and I believe the Free Fringe will."

Peter Buckley Hill and Some Comedians XV, The Canons' Gait

The Free Fringe founder reprises the show with which he started the Free Fringe in 1996. Four different comedians appear each night as compered by Buckley Hill. Some 254 acts have appeared underneath its umbrella in the Free Fringe's history.

John Otway, Otway on Otway, Voodoo Rooms

Music and comedy from "rock's biggest failure", known for a sizeable cult audience and self-deprecating sense of humour.