The Cameri Theatre in Tel Aviv is considering legal action for breach of contract against the veteran British theatre director, Peter Brook, after he pulled out of its annual International Festival of Plays in December.

The Paris-based Mr Brook, 87, is director of Théâtre des Bouffes du Nord, which was due to perform The Suit, a play set in apartheid South Africa, at the festival.

But Mr Brook has declared that his company will not take part because he is “against the act of colonisation”.

A spokesperson for the Cameri said the theatre was “shocked” by Mr Brook’s last-minute decision as after a contract with the Paris company was signed in August, 300 tickets had been sold, and $5,000 was spent on advertising. Subsequently $10,000 was refunded to the disappointed audience.

The spokesperson said: “We sold out of tickets because everyone knows how good a director he is, I mean, he’s Peter Brook and he’s Jewish. We were very surprised.”

However, Marko Rankov, from Théâtre des Bouffes du Nord, contested the claim and said: “No contract was signed with the Cameri when we finally decided not to perform there.”

He acknowledged that the decision was made following pressure from BDS (boycott, divestment and sanctions) groups “that were responsible for asking us to boycott the Cameri”.

Mr Brook signed a letter to the Cameri which said: “The fact that the Cameri Theatre has accepted to support the brutal action of colonisation by playing in Ariel [in the West Bank] has made us aware that in coming to your theatre we would appear as a support for that brutal action.

“This forces us to decline your invitation to perform in your theatre. The decision is entirely ours, and not to come to you, it is our free choice.

“We know that there are many amongst you and in your country who share our attitude and it is them we wish to support as well as the people of Palestine.”

The Cameri has been reluctant to pursue legal action as it does not want to get a “bad reputation” among other international theatre groups, a spokesperson confirmed.

Mr Brook, a former director of the Royal Shakespeare Company, was awarded the $1 million Dan David Prize at Tel Aviv University in 2005.