Baillie Gifford partner Nick Thomas said: “The activists’ anonymous campaign of coercion and misinformation has put intolerable pressure on authors and the festival community.

“We step back with the hope that the festival will thrive this year and into the future. We hold the activists squarely responsible for the inhibiting effect their action will have on funding for the arts in this country.

“Baillie Gifford is a long-term investor with high ethical standards and a complete focus on doing what is right by our clients.

“The assertion that we have significant amounts of money in the Occupied Palestinian Territories is offensively misleading.

“Baillie Gifford is a large investor in several multinational technology companies, including Amazon, NVIDIA, and Meta.

“Demanding divestment from these global companies, used by millions of people around the world, is unreasonable and serves no purpose. Much as it would be unreasonable to demand authors boycott Instagram or stop selling books on Amazon.

“Nor is Baillie Gifford a significant fossil fuel investor. Only 2% of our clients’ money is invested in companies with some business related to fossil fuels. We invest far more in companies helping drive the transition to clean energy.

“We remain committed to contributing positively to our community through philanthropic support.”

The book festival said: “The board and management of Edinburgh International Book Festival believe their ability to deliver an event this August that is safe and successful for audiences, authors and staff has been severely compromised, following the withdrawal of several authors and threats of disruption from activists.”

Edinburgh International Book Festival CEO Jenny Niven said: “It is with great regret that our board of trustees and Baillie Gifford have collectively agreed to end our partnership.

“We are hugely grateful to the firm for its considerable support over two decades, including through some challenging times for the festival, and we are proud of what we’ve achieved together during that time.

“The pressure on our team has simply become intolerable. We have a major global festival starting in 10 weeks’ time and we need to focus all of our efforts and energy on delivering a safe and successful event for our audiences.

“Undermining the long-term future of charitable organisations such as book festivals is not the right way to bring about change.

“It diminishes the voices of those who feel strongly about these complex issues, and it will be infinitely harder to build and sustain well-funded cultural institutions in the future than it is to put them out of business today.

“We speak to all our supporters about these complex issues and continue to believe that Baillie Gifford is part of the solution in transitioning towards a more sustainable world and that the firm operates in line with our Ethical Fundraising policy.”

Edinburgh International Book Festival chair Allan Little said: “Our team cannot be expected to deliver a safe and sustainable festival this August under the constant threat of disruption from activists. This was a pragmatic response to that reality.

“Funding for the arts is now in a perilous position and we should all be clear that without the support of our partners and donors, the future of festivals like ours – and all of the benefits these events bring to authors and readers alike – is in jeopardy.

“We are a charity that provides an important platform for authors and readers of all views and political opinions to agree, disagree, challenge, and provoke.

“Book festivals around the world are forums in which rigorous, intelligent debate can take place. Our festival should be a place where progressive and nuanced discussion can happen in a safe and respectful space.

“Indeed, our programme this year is designed to give a voice to those directly affected by conflict and those engaged at the most senior levels in its resolution.

“We will explore the real challenges involved in transition, green tech and climate finance, misinformation and the need for new economic models.

“We are determined to have those debates and to have them out in the open, but we need everyone to come to the table.

“We have made several invitations to Fossil Free Books, and other groups, to attend this year’s festival and regret that they have not responded to those offers.”