The Israeli film director at the centre of an argument over film festival funding has hit back at anti-Israel campaigners.

Tali Shalom Ezer said she was “outraged” at comments made by controversial director Ken Loach, in which he claimed Israel had conducted “massacres and state terrorism in Gaza”.

Following Mr Loach’s remarks, organisers of the Edinburgh International Film Festival rejected a £300 donation from the Israeli Embassy.

The money was to be used to fly Ms Shalom Ezer to Scotland for the screening of her debut film, Surrogate.

She told the Scotsman: “Generalising all citizens of Israel as warmongers and racists is racism and outrageous, and as members of the peace camp we are personally hurt by it.”

Mr Loach responded by saying he had called for a boycott of Israel and not of individual filmmakers. He said there was “no taint of racism”.

But the Israeli said his remarks had created “a situation in which going to see Surrogate means supporting the state of Israel”.

Ms Shalom Ezer said she will still attend the June 21 screening, with the festival funding her travel out of its own budget.

The festival chairman, Iain Smith, has apologised for the “distress” caused during the funding row.

He said: “I apologise sincerely for the distress many people have felt at changes in the arrangements for bringing the director of Surrogate to the festival.

“Clearly we didn’t appreciate enough that our festival cannot keep itself entirely detached from very serious geopolitical issues and I am instituting a review of our procedures to ensure that there can be no repeat incident.”