The Turner Prize has ended a sponsorship deal with Stagecoach South East – a day after it was announced.
The firm was to support an exhibition of the four shortlisted artists at the Turner Contemporary gallery in Margate.
But there was criticism as the chairman of its parent company had backed a ban on teaching LGBT issues.
The local bus company said the decision had been “mutually agreed” and while it was committed to diversity did not want anything to distract from the artists.
Gay rights campaigner Peter Tatchell was among those against the prize’s partnership with Stagecoach South East. He told the Daily Telegraph he was “surprised and disappointed” when he heard the announcement.
Sir Brian Souter, who backed a failed campaign 19 years ago to keep Section 28 – a law banning teachers discussing gay rights in Scottish schools – is the co-founder and chairman of the Stagecoach Group.
In a statement, Turner Contemporary and the Tate gallery – which organises the annual prize – said its priority was to “show and celebrate” artists and their work.
It said: “The Turner Prize celebrates the creative freedoms of the visual arts community and our wider society.
“By mutual agreement, we will not proceed with Stagecoach South East’s sponsorship of this year’s prize.”
Stagecoach South East said: “We are absolutely committed to diversity in our company, however we do not want anything to distract from celebrating the Turner Prize artists and their work.”
The winner of the £40,000 prize will be announced on 3 December.
This year’s Turner Prize nominees are Lawrence Abu Hamdan, Helen Cammock, Oscar Murillo and Tai Shani.
The shortlist of artists was announced on Wednesday and their work tackles issues including oppression and marginalised communities.
Last year’s Turner Prize was won by artist Charlotte Prodger for her film on her experience of coming out as gay in rural Scotland.