Council chiefs told ride operators M&D’s to stop the wheel after receiving a warning from the Health and Safety Executive.
It told them that the Festival attraction was inspected by the same man who gave the all-clear to a rollercoaster in Motherwell shortly before it came off the rails in a horror crash in June.
In its letter, the HSE raised “serious concerns” and told all fairground owners with safety certificates issued by Craig Boswell to reinspect their rides.
The 44-metre Ferris wheel closed last Wednesday and only reopened late yesterday once fresh checks were carried out.
A spokeswoman for M&D’s Events, which also operates the Edinburgh Festival Wheel, said: “Following discussions with Edinburgh City Council, we took the decision to temporarily close the attraction to allow for an additional inspection, carried out by a certified independent expert.
“The Edinburgh Festival Wheel passed the inspection and reopened yesterday for visitors to enjoy.”
A spokeswoman for the city council confirmed that the ride was temporarily closed while “precautionary checks” were carried out.
Conservative city centre councillor Joanna Mowat described the situation as an “embarrassment”, particularly at the start of the Fringe when thousands of visitors flock to the city.
She added: “I don’t really know why we have a big wheel when there are so many vantage points across the city.
“Why would you pay for this when you can get better views for free from Calton Hill?
“It’s bad enough that we have this wheel in the first place but to not be able to use it for a week adds insult to injury. It is embarrassing, particularly at Festival time when thousands of people flock to the city.”
But Jim Orr, independent councillor for Southside/Newington, said: “Safety is of utmost importance, especially given the recent accident in Lanarkshire.”
The HSE wrote to the city council to tell them that there was “the potential for other rides examined by Mr Boswell to be unsafe”, adding that public confidence may have been “undermined”.
Ten people were injured on June 26 when five carriages on the Tsunami rollercoaster at the M&D’s theme park in Motherwell derailed at up to 40mph.
Wreckage and victims crashed to the ground. Three children were seriously hurt and bystanders tried to free the trapped youngsters.
The Tsunami rollercoaster was inspected by Boswell on June 10.
Following the accident, he removed himself from the Amusement Device Inspection Procedures Scheme (Adips) register and was subsequently given an HSE ban.