A group of environmental activists, artists, philanthropists and traditional owners say the Darwin Festival has rejected an ethical funding offer that would replace a gas company's long-running support.
But the festival's board said it could not accept the money because it had strings attached that could have adversely impacted the event's independence.
"There were some non-negotiable terms and conditions set out in the offer that could have had wider implications to the independence and operations of the festival," a spokesman for the festival said in a statement on Thursday.
"Attempts by the board to enter into negotiations around these terms were declined and after careful consideration, the board made the decision to decline the sponsorship offer."
Fossil Free Arts Northern Territory and its backers made a $200,000 philanthropic offer in the wake of gas giant Santos's decision not to renew its sponsorship contract after the 2022 festival.
The company ended its almost 30-year support in October after a campaign by environmental activists and traditional owners, which included an open letter from 300 artists and producers..
Fossil Free Arts NT said the terms of the offer included granting Darwin's Larrakia people naming rights to the Indigenous-themed opening night concert and developing an ethical sponsorship charter.
"Philanthropists offered support to replace the Santos sponsorship, but instead the board of the festival has refused the opportunity to bring the event in line with community values," the group's spokeswoman, Anna Weekes, said.
The festival's website says its principal partner is the NT government and its major partners are gas company Inpex and Coopers Brewery, while Darwin-based Airport Development Group is listed as a "partner in excellence".
Ms Weekes said the group offering the funding urged the festival board to reconsider its decision and the opportunity to move towards a "sustainable sponsorship framework".
"Festival artists, audiences and First Nations communities are disappointed that the board is refusing to develop an ethical sponsorship policy which rules out fossil fuel sponsorship, as many other festivals and cultural institutions have done in Australia and overseas," she said.
The festival's board said the festival's financial future was secure and the event was scheduled to return in 2023.
