The Edinburgh International Film Festival on Tuesday returned a 300-pound grant from the Israeli embassy, after bowing to pressure from director Ken Loach, the British Times reported on Wednesday.

The grant was intended to enable Tel Aviv University graduate Tali Shalom Ezer to travel to Scotland for a screening of her film, Surrogate.

According to the Times, Ezer's film is a romance set in a sex-therapy clinic, and makes no reference to war or politics. It recently won the award for best film at an international women's film festival in Israel.

Loach on Monday urged film goers to boycott the festival after pro-Palestinian activists protested the grant for the Israeli film. Loach has long been an outspoken critic of Israel and its actions in Gaza and Lebanon.

"The massacres and state terrorism in Gaza make this money unacceptable," the Times quoted Loach as saying. "With regret, I must urge all who might consider visiting the festival to show their support for the Palestinian nation and stay away."

In a statement, festival representatives said that Loach spoke "on behalf of the film community, [and] therefore we will be returning the funding issued by the Israeli Embassy," the Times reported.

Sir Jeremy Isaacs, the former chief executive of Channel Four, told the Times that the festival's organizers made "an appalling decision" and urged them to reconsider.

Isaacs called Loach's intervention an act of censorship, and added: "They must not allow someone who has no real position, no rock to stand on, to interfere with their programming."

A festival spokesman said it would fund Shalom Ezer's travel to Edinburgh using its own budget.