A literary festival has dropped its major sponsor partnership over calls from anti-Israel writers and celebrities.

The Hay Festival has caved to pressure from campaigners from the group Fossil Free Books (FFB) who claimed that its principal sponsor, the investment management firm Baillie Gifford, had links financial links to Israel.

Anti-Israel singer Charlotte Church, stand-up comedian Nish Kumar, Labour peer Shami Chakrabarti and Dawn Butler MP were among the speakers to pull out over Baillie Gifford’s sponsorship of the festival.

On Friday afternoon the festival said that it was ending its sponsorship deal with the company.

The Hay CEO, Julie Finch, said “In light of claims raised by campaigners and intense pressure on artists to withdraw, we have taken the decision to suspend our sponsorship from Baillie Gifford.

“Our first priority is to our audience and our artists,” she added. “Above all else, we must preserve the freedom of our stages and spaces for open debate and discussion, where audiences can hear a range of perspectives.”

Hay orgnisaters plan to meet with representatives from FFB after this year’s festival. The group was also behind a controversial motion at the Society of Authors that Jewish authors said was “one sided” and “extremist”.

Baillie Gifford has backed the Hay Festival since 2016 and sponsors several other prominent literary events, including the Edinburgh International Book Festival and Cheltenham Literature Festival.

A Baillie Gifford spokesperson said: “It is regrettable our sponsorship with the festival cannot continue.”

FFB has called for “A literary industry free from fossil fuels, genocide and colonial violence is possible and it is necessary.”

The group threatened that literary organisations which accept sponsorship from Baillie Gifford “can expect escalation, including the expansion of boycotts, increased author withdrawal of labour, and increased disruption until Baillie Gifford divests”.

They claim Baillie Gifford has "nearly £10bn invested in companies with direct or indirect links to Israel's defence, tech and cybersecurity industries, including Nvidia, Amazon and Alphabet.”

The company has called the FFB’s statement “seriously misleading”.

A spokesperson for Bailly Gifford said that while the company’s clients have invested in multinational technology companies including Meta and Amazon which have dealings with Israel, these are “tiny in the context of their overall business”.

The spokesperson added that “practically every consumer and investor in the developed world is using the services of these companies.”