The permit has caused an outcry because officials have for months slashed the number of people allowed into other public events, forcing many of them to cancel.
The announcement came as the center-left Socialist government is seeking political support from other parties, including the Communists, for its 2021 spending plan.
The festival, called Festa do Avante, features concerts and political speeches in a fenced-off area of countryside south of Lisbon. In past years it has drawn some 100,000 people, of a wide variety of ages, over its three days.
The event is a major source of income for the Communist Party, which has 10 seats in Portugal’s 230-seat parliament.
The General Directorate for Health announced Monday that 16,563 people can be inside the festival at any one time, even though “there is a real risk that, during the event, infected people with or without symptoms may be moving around.” The Communist Party had wanted to sell 33,000 tickets per day this year.
Authorities say people at the festival must remain at least two meters apart, unless they share a household; concerts can take place only with distanced seating for the audience; no alcohol can be sold after 8 p.m.; and everyone over age 10 must wear a mask, among other measures.
Health Minister Marta Temido that “the rules are well though-out.”
“We hope the organizers are able to implement them and ensure people abide by them,” she told a news conference.
The calculation of how many people can be at the festival was based on criteria used for how many can be on beaches, officials said.