Fleadh Cheoil na hÉireann, Ireland's biggest traditional music and culture festival, has snubbed energy giant Shell after environmentalists complained over sponsorship from the company.

Organisers of the Fleadh, which attracts about 300,000 visitors every year, took the last-ditch decision to reject money from the oil and gas multinational after they were accused of prostituting themselves.

Activists from the Shell to Sea group claimed President Michael D Higgins was being put in an awkward position by officially opening the event even though he has spoken out in favour of the communities affected by Shell's controversial Corrib gas project in Co Mayo.

The environmentalists claimed the music organisation that plans and promotes the Fleadh, Comhaltas Ceoltóirí Eireann, was reneging on its ethos of promoting peace by accepting money from Shell.

The heads of the group met today to discuss the fallout and decided to return the money to the energy giant.

In a statement the music organisation said: "In keeping with the ethos of Fleadh Cheoil na hÉireann as an inclusive, community-driven and family focused event and to avoid any unnecessary distractions on the eve of the festival, we have respectfully decided to return the financial support received from Shell."

The last-ditch challenge to the Fleadh funding came with the massive traditional music extravaganza, which begins in Sligo on 10 August, less than a week away.

The exact amount of money has not been confirmed.

Shell E&P Ireland, the Irish subsidiary of the multinational energy giant, said it was disappointed by the decision and said the organisers of the Fleadh had originally approached the company seeking funding.

"Our support for the 2014 Fleadh in Sligo is in keeping with our continuing investment in cultural, community and family events run by volunteers," it said.

"SEPIL was approached by the organisers of the Sligo Fleadh in early 2014 to become an event sponsor."

Shell said the funding would have built on money it gave to the Mayo branch of Comhaltas Ceoltóirí Eireann in 2009.

The company also claimed it has a proud record of assisting community and voluntary organisations in Co Mayo including the GAA, Erris Tourism and Feile Iorrais and scholarships for local students to attend Irish language summer colleges.

Shell added: "We hope that everyone who attends the Sligo Fleadh will enjoy this wonderful festival of Irish music, drama and song and we wish the organisers every success."

Maura Harrington, one of Shell to Sea's most vocal campaigners, said it was a short, sharp and successful campaign.

"I am delighted with that decision. It shows Shell's attempts at cultural colonisation has not worked," she said.

Shell to Sea had planned to protest at the Fleadh over the sponsorship row and the organisers' plans to promote a section of the week-long celebrations under the banner Peace in the Fleadh.

The organisers had said the section would show peace building at its best and use "the unifying power of our shared culture to bridge cultural difference, promote understanding and address the legacies of conflict and partition".