Santos has pulled its sponsorship of the Darwin Festival following a campaign by environmentalists, artists and Indigenous leaders concerned about the company’s involvement in the festival and its Barossa gas field development.

A coalition of environmentalists and traditional owners called Fossil Free Arts NT said it offered the festival’s board $200,000 over the next two years in alternative funding on the condition it ended its sponsorship agreement with the energy company.

However, it was not disclosed how much Santos had been paying the festival.

The festival was nearly cancelled in 2016 after the board posted huge deficits and sought government bailouts to survive.

Santos sent a letter to the board on Tuesday confirming it would not be providing funding for next year’s festival.

“As we understand it, the board now has alternative sponsorship options for the Darwin Festival, which has not been the case in previous years,” the letter said.

The Darwin Festival released a statement Tuesday night, thanking the compnay for its support.

“The board of Darwin Festival would like to thank Santos for its support over those years, particularly for supporting the opening night concert which has helped showcase local Australian artists and provide Territorians with a free night of entertainment to kick of the Festival each year.”

Fossil Free Arts NT spokeswoman Anna Weekes said in a statement that Santos pulling its funding was a “huge win” for traditional owners and that the company’s “attempts to greenwash its gas projects no longer wash with artists, audiences or the wider community”.

“It’s now time for Darwin festival to show leadership and make a clear commitment to end all ties with fossil fuel money and develop an ethical sponsorship policy to avoid these controversies in the future and set an example that prioritises first nations culture, local communities and a safe climate in the territory,” she said.

Ms Weekes also called for the Darwin Festival board to be rearranged to better represent the community.

“It’s also time for a shake up of the current board which has allowed these risks to our festival to persist for so long, with more artists and cultural workers appointed to engage and listen to our communities and our sector,” she said.

The financial cost to the festival of Santos pulling its sponsorship remains unknown. In 2016, the festival was nearly cancelled after running a $343,000 deficit the year before and claiming it could not go ahead without additional government investment. The board was later financially bailed out by the NT Government.