Limmud-Oz, the Australian arm of the global festival of Jewish learning, is at the centre of controversy after organisers banned two presenters who "publicly advocate a total boycott against Israel" and a major donor threatened to withdraw funding.

The executive of Limmud-Oz released a statement last week saying it believes that the Boycott, Divestment & Sanctions (BDS) campaign is "an attack on Israel's basic legitimacy and harms the Jewish people as a whole".

Programme director Michael Misrachi confirmed that, as a result, Peter Slezak, a co-founder of Australian Independent Jewish Voices, and Vivienne Porzsolt, a spokeswoman for Jews Against The Occupation, were disinvited from the two-day festival in Sydney in mid-June.

Mr Slezak accused organisers of "moral and intellectual weakness" while Ms Porzsolt said the ban "smacks of excommunication".

Days later the Shalom Institute, which runs Limmud in Sydney, confirmed that a major donor threatened to withdraw funding if Naomi Chazan, the president of the New Israel Fund, makes her scheduled presentations.

Boycotts are an attack on Israel’s legitimacy

Ms Chazan, a former deputy speaker of the Knesset, was due to visit Australia in 2010 but cancelled following a controversial campaign by Im Tirtzu, a right-wing Israeli group that accused NIF of being responsible for the Goldstone Report - a charge NIF dismissed as baseless. Ms Chazan is coming to Australia to officially launch NIF's Australian branch.

But Shalom Institute CEO Hilton Immerman dismissed the threat. "We believe that she is a patriotic Israeli who has contributed much to the Jewish homeland," Mr Immerman said of Ms Chazan. "We will not bow to any pressure to withdraw her from the programme."

Robin Margo, the inaugural chair of NIF in Australia, lauded Shalom's board for "refusing to cave in to the pressure".

"Unfortunately, this is the sort of thing that happens when hysteria is whipped up in a community," he said.

But Mr Immerman defended the decision to drop the two BDS proponents. "In supporting BDS, these individuals advocate denying free speech to Israeli academics and performers, on whom we depend for Limmud-Oz, yet, ironically, claim this right for themselves."

They may, however, attend the festival, he added. "Limmud-Oz remains a very broad tent - the programme includes and celebrates a wide diversity of opinions."

The "boycott of the boycotters" prompted two other presenters to withdraw last week in protest.

"We abhor the idea of being associated with an event that bans ideas," Jenny Green and Joel Nothman said in a letter to the Limmud executive.