The Tricycle Theatre has sparked controversy by refusing to host an annual Jewish film festival sponsored by the Israeli government in light of the current conflict between Hamas and Israel.

Jonathan Levy, chairman of the theatre in Kilburn High Road, e-mailed the organisers of the UK Jewish Film Festival (UKJFF) to inform them the theatre could not host this year’s festival unless it severed its funding ties with the Israeli embassy in London.

He said the “unforeseen and unhappy escalation” of violence in the Gaza Strip meant “The Tricycle cannot be associated with any activity directly funded or supported by any party to the conflict”.

The theatre has offered to provide “alternative funding to cover the loss of the contribution from the Israeli embassy” which the festival organisers have rejected.

Stephen Margolis, chairman of the UKJFF, said: “The Jewish community as a whole has enjoyed a successful relationship with the Tricycle and it is extremely saddening that they should look to politicise this festival by making demands that the UKJFF could never accept.”

The UKJFF, due to be held for the 18th time between November 6 and 23, was expected to hold at least 26 of it films at the Tricycle this year, as well as six gala events, and is now in the process of making alternative arrangements.

Organisers insist the festival, which has been sponsored by the Israeli embassy since its inception, is apolitical but portrays the “unmistakeable cultural connection between Jewish people and the State of Israel”.

Judy Ironside, UKJFF founder and executive director, said: “We have always sought to convey a wide perspective on the conflicts in the Middle East and initiate open dialogue with our audiences and guest speakers; and the Israeli embassy have always supported us in this. The Tricycle have refused to take this into account in their decision.”

Speaking yesterday, actress Maureen Lipman said: “The Tricycle Theatre under Nick Kent had a stunning history of truthful story telling. A great part of its support and its audiences came from the Jewish sector.

“We always knew that even if we disagreed with the message, we accepted that it came from a reasoned and balanced argument. Today that ceased.

“The Tricycle have decided to punish Jewish people in the diaspora for one view of what is taking place in the Middle East and that is quite unacceptable.”

Louise Jacobs, chief executive of the London Jewish Cultural Centre, said: “It’s always regrettable when politics clashes with culture and creates rifts in communities working hard to celebrate multiculturalism.”

Indhu Rubasingham, artistic director of the Tricycle, said: “We offered to provide alternative funding to cover the loss of the contribution from the Israeli embassy. We WANT the festival. Now, more than at any time, Jewish culture MUST be celebrated.

“The Tricycle serves many different communities and cultures and must navigate neutrality which is why it cannot directly be taking government money in this difficult time.

“However, the UKJFF decided it was not willing to decline sponsorship from the Israeli embassy and, to our regret, withdrew the festival from the Tricycle.”