Financial loss and the threat of rebuke from the Charity Commission were partly behind the decision of British architects to drop a proposed boycott of their Israeli counterparts.

The Royal Institute of British Architects (Riba) last week confirmed its council had rescinded its call for Israeli architects to be suspended from the International Union of Architects (UIA), nine months after initially voting for the policy.

Stephen Hodder, the institute's president, admitted "we got it wrong", but refused to apologise formally for the upset caused to British Jews.

"While we recognise the seriousness of the issues facing communities in Israel and the West Bank, it was inappropriate for the institute to engage in this way," he said of the boycott stance.

"We have got to recognise that there has been reputational damage, but we have to look to the future."

Mr Hodder denied Riba had "caved in" for financial reasons but admitted the affair had cost the institute more than £100,000 in cancelled bookings.

Jewish families cancelled simchas at Riba's prestigious central London headquarters in the wake of the boycott being adopted in March.

The motion had called for Israelis to be barred from the UIA in response to concerns about Palestinian human rights and Israeli settlement building. It proved hugely controversial, with Jewish and pro-Israel architects around the world criticising the decision.

Mr Hodder said Riba should not shy away from controversial issues but acknowledged that, "the resolution concerning the Israeli association did not make a constructive contribution to the current situation".

Riba's changed stance also came after lawyers warned that its policy was outside its charitable remit and could lead to Charity Commission censure.

"The conclusion of legal counsel was that, while it was in our capacity as a corporate body to address such an issue, it was not in furtherance of our charitable objectives," said Peter Oborn, chair of Riba's international task group. "This was a question that should not have come before council in the first place."

The institute's council approved a report compiled by Mr Oborn's group which outlined how it should approach future humanitarian issues abroad.

This promotes "opportunities for engagement" with Israeli and Palestinian architects and outlines projects that British architects could assist with, such as the redevelopment of Tel Aviv bus station, and the reconstruction efforts in Gaza.