The Dark Mofo art festival in Hobart, Tasmania, had asked for “First Nations people” to “donate a small amount of blood” for Spanish artist Santiago Sierra’s work Union Flag.
Organisers claimed that soaking the flag in “the blood of its colonised territories” would illustrate the violence of imperialism.
But after it was branded offensive and “repulsive” the piece has been pulled.
Festival director Leigh Carmichael wrote on Facebook on Tuesday: “We’ve heard the community’s response to Santiago Sierra’s Union Flag.
“In the end the hurt that will be caused by proceeding isn’t worth it. We made a mistake, and take full responsibility. The project will be cancelled.
“We apologise to all First Nations people for any hurt that has been caused. We are sorry.”
Many were quick to accuse the artist and festival organisers of causing “trauma, distress, anxiety and pain” to indigenous communities across Australia.
Others pointed out the inappropriateness of the location as Tasmania saw several massacres of Aboriginal people in the 19th century.
Former speaker of the Australian House of Representatives Bronwyn Bishop told Sky News Australia the project was “truly repulsive”.
“I found it again interesting that the people who organised the summer festival for that museum also repudiated this whole concept – as have indigenous people themselves.
“It has just been disgusting really so it’s now being cancelled – as it should be.”
The festival itself will still go ahead in June.