Edinburgh International Book Festival has been forced to defend its sponsor after more than 50 authors raised concerns over its support for fossil fuel companies.

Fund manager Baillie Gifford’s backing of the festival has already been blamed for climate activist Greta Thunberg pulling out of a speaking engagement.

Today the festival organisers received an open letter from over 50 authors, including Ali Smith, Zadie Smith and Gary Younge who have threatened to boycott the event next year.

Nick Barley, director of Edinburgh International Book Festival, has written back saying the organisers “fully acknowledge your concerns about the devastating impact of fossil fuel exploitation on the climate: as individuals and as a charity we firmly agree.”

He said the concerns raised would be considered, but said the objectors should consider the good work that Baillie Gifford is undertaking.

“We looked very closely at the work of Baillie Gifford and it seems to us that they are in fact investing in companies that are seeking to resolve the crisis,” said Mr Barley.

“Those companies include Ørsted, the Danish windfarm specialist. Ørsted was mandated by the Danish government to keep two coal-fired power stations open until 2024 as a result of Russia’s invasion of Ukraine – and that is the only reason why a small percentage of their income still comes from fossil fuels.”

Mr Barley offered the authors an opportunity to discuss the situation so that they could get a better understanding of the reasons behind accepting Ballie Gifford’s support.

“I hope you will talk with me and my colleagues, and discuss the complexities of this issue with us,” he said. “Surely the best place for such conversations is at Book Festivals like ours. I invite you to the festival because I believe in the power of your words. I am keen to learn from you about this; to hear your expertise; to understand your perspective. I promise to consider what you say carefully, and keep an open mind about how to proceed.

“For that reason I’m proposing that we talk at the festival – with each other and with audience members who share the same concerns.”

UPDATE 14 AUGUST: Mikaela Loach, an author and climate activist, interrupted her panel discussion on Saturday evening to stand against Baillie Gifford, accusing it of investing in “companies who make money from fossil fuels”.

In a video shared by Loach on Instagram on Sunday, the author stopped her discussion, titled Changing the Climate Narrative, saying: “I can’t actually in good faith continue just talking about these issues without doing something, especially given that the festival is sponsored by an investment firm that is bankrolling this climate crisis.

“Baillie Gifford are an investment firm that have £5 billion of investments in the fossil fuel industry. Edinburgh Book Festival, you wouldn’t burn books, so why are you burning the planet? Drop Baillie Gifford.”

The author, who is of Jamaican descent, added: “I think especially recently, if you look across the world, Maui is literally on fire. I don’t know if my ancestral land will still be there if I have children or if I have descendants. And the reason for this is because of investments in fossil fuels.

David Greig, director of Edinburgh’s acclaimed Royal Lyceum Theatre, told The Sunday Times that the campaign to ditch the book festival’s main sponsor was dangerously “counterproductive and shortsighted”.

Severing links with corporate sponsors on unsubstantiated grounds risked undermining the finances of the entire arts sector in Scotland, he said.

“I am far from alone in the arts echelon in Scotland in thinking this [letter] is both counterproductive and shortsighted,” Greig said. “It is wrong in both principle and practice.

“The Edinburgh Book Festival has been made better by this engagement with corporate sponsors alongside contributions from public funds, other donations and ticket sales.

“There is no reason why arts organisations should not accept money from companies like Baillie Gifford, which is a good company that is forward-thinking and progressive.

“They have a long track record of funding the arts in Scotland and their business ethos is sound.”