The 20-year-old was due to speak at an event on 13 August but pulled out in protest over sponsors Baillie Gifford, an investment management firm she claims invests "heavily" in fossil fuels.

The firm have rejected the accusation, saying only 2% of its clients' money was put in companies with some business related to fossil fuels.

The event organiser said he "respects" the decision made by the activist, but said he believes Baillie Gifford to be "part of the solution to the climate emergency".

In a statement, the campaigner said: "As a climate activist I cannot attend an event which receives sponsorship from Baillie Gifford, who invest heavily in the fossil fuel industry.

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"Greenwashing efforts by the fossil fuel industry, including sponsorship of cultural events, allow them to keep the social licence to continue operating.

"I cannot and do not want to be associated with events that accept this kind of sponsorship."

Baillie Gifford said the percentage of its clients' money that it invests into fossil fuels compares to the market average of 11%.

A spokesperson said: "When we invest in companies on their behalf, we do so over long time periods, typically 10 years or more, so this has naturally led us away from traditional fossil fuel firms."

But, they also insisted that 5% of their clients' money was invested "in companies whose sole purpose is to develop clean energy solutions".

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Festival director Nick Barley said he was "disappointed" but fully respected the activist's decision.

"However, in applauding Greta for standing by her principles, we too must stand by ours," he said.

"The Book Festival exists to give a platform for debate and discussion around key issues affecting humanity today - including the climate emergency. As a charitable organisation, we would not be in a position to provide that platform without the long-term support of organisations such as Baillie Gifford.

"We strongly believe that Baillie Gifford are part of the solution to the climate emergency."

The director apologised to those who had bought tickets to the event at the Edinburgh Playhouse, and promised refunds.

The environmental campaigner was fined by a Swedish court last week after she admitted disobeying police orders following a protest in Malmo.