Barclays will no longer sponsor the Latitude, Download or Isle of Wight festivals after bands dropped out in protest at the bank’s ties to defence companies supplying Israel.

Live Nation, the international entertainment company, asked the bank to suspend sponsorship of its festivals this year after holding talks with musicians amid a growing boycott.

Barclays signed a five-year sponsorship deal with the company last year, although the suspension is understood not to apply to the entire contract.

The decision came as the group behind the boycott campaign said its movement was gathering speed like a “runaway train”.

The bank called on the arts industry to “stand united” after more than 20 of its branches were vandalised this week.

“The protesters’ agenda is to have Barclays debank defence companies which is a sector we remain committed to as an essential part of keeping this country and our allies safe,” it said. “They have resorted to intimidating our staff, repeated vandalism of our branches and online harassment.

“The only thing that this small group of activists will achieve is to weaken essential support for cultural events enjoyed by millions. It is time that leaders across politics, business, academia and the arts stand united against this.”

More than 160 acts boycotted the Great Escape festival in Brighton last month and dozens more have pulled out of Latitude and Download. The campaign group Bands Boycott Barclays (BBB) said it was supported by 700 artists and industry professionals.

A leading member, Yasmeen, 30, a musician who declined to give her surname, said: “Over a third of the line-up withdrew their labour from the Great Escape. A lot of musicians felt disgusted that a company that’s bankrolling genocide is then getting this reputational acclaim by being part of what is effectively a gem of the music industry.”

Yasmeen said BBB was born “in consultation” with the Palestinian Solidarity Campaign (PSC) and the Palestinian-led boycott, divestment and sanctions (BDS) movement.

PSC has accused Barclays of “bankrolling Israel’s genocidal assault on Palestinians”. BDS, which organises the boycott of corporations linked to Israel, features Barclays on a list of “divestment and exclusion” targets.

Activists had watched in March as dozens of acts pulled out of the South by Southwest festival in Austin, Texas, in protest at sponsorship by the US Army.

By May, the idea of a boycott had spread across the Atlantic and centred on the sponsorship of several highprofile music festivals by Barclays.

On its website, BBB has a link to a PSC report about Barclays that said it held £2 billion in shares and provided £6.1 billion in loans and underwriting to nine companies.

The report said those companies were providing weapons, components and military technology to Israel to be used in its attacks on Palestinians. Barclays sources said the bank’s name appeared on the shares because of the financial services it provided to clients, not because it had invested in the companies.

The bank said it would not routinely stop financial services to defence companies without instruction from a government or regulator.

It said it could not debank people “without legitimate reason”. The debanking row arose last year, when Nat- West dropped Nigel Farage over his political views.

A bank spokesman said: “We provide financial services to US, UK and European public companies that supply defence products to Nato and its allies.

Barclays does not directly invest in these companies. The defence sector is fundamental to our national security and the UK government has been clear that supporting defence companies is compatible with ESG considerations.

Decisions on the implementation of arms embargoes to other nations are the job of respective governments.”

BBB said that the Barclays withdrawal was “a victory for the Palestinian-led global BDS movement”. It added: “Hundreds of artists have taken action this summer to make it clear that this is morally reprehensible. Our demand to Barclays is simple: divest from the genocide or face further boycotts.”