A vicar has caused a festive furore after accidentally breaking the news to a group of primary school pupils that Father Christmas doesn't really exist.

Parents at Charter primary school in the Wiltshire market town of Chippenham were left fielding some very awkward questions after Canon Simon Tatton-Brown explained how Santa was based on the legend of Saint Nicholas.

Some parents threatened to pull their children out of a Christmas concert at his church, St Andrew's, in protest, arguing that they would not barge into one of his services and announce that the story of Jesus was a fiction.

Tatton-Brown's slip came as he delivered his festive address to pupils. A "technical issue" meant he had to work without notes and he told them that many believed the figure of Father Christmas was based on Saint Nicholas, a fourth-century saint renowned for his secret gift-giving.

Canon Simon Tatton-Brown has apologised for his 'festive address'. Photograph: Adam Gray/SWNS.com

The very youngest pupils were not at the assembly but many others went home with their belief in Santa shattered. Realising his error, Tatton-Brown, who is due to retire on New Year's Eve, apologised to the school.

But not all parents were in a forgiving mood.

Linzi Merritt, whose son Levi, nine, attends the school, said: "We wouldn't just walk into the church during one of his services and tell everyone there that Jesus isn't real. He's a person of authority and it's not his place to be telling the children that.

"It's the older children who have suffered the most because their parents can't really talk their way out of it like the parents of younger children can.

"Loads of kids went home crying – it has ruined Christmas for them. It wasn't a nice story for children to hear, there were lots more he could have told. Not only has he spoiled Father Christmas for them, a lot of them are now questioning the existence of the tooth fairy as well."

Kerry Butler, whose nine-year-old daughter Kacey is a pupil, said: "All the parents here are very upset. I think it's a lot worse for the older children because a lot of them are on the cusp of not believing anymore and this could have pushed them over the edge."

Tatton-Brown wrote to headteacher Sarah Flack to apologise. His letter said: "I was very sorry to hear of the trouble following my assembly. I talked about Saint Nicholas, and the stories about him, which tells us why Santa Claus brings gifts at Christmas.

"I am sorry if this was misunderstood. I fully support parents who want their young children to enjoy the Christmas stories, including Father Christmas, and I had no intention of undermining their belief in the reality of Santa Claus."

The school has accepted his apology. Tatton-Brown was getting on with his preparations for Christmas on Thursday and referring inquiries to the diocese of Bristol.

A spokesman said: "When Simon discovered that what he had said had cast into doubt the existence of Santa Claus, he contacted the headteacher by phone and volunteered an apology to be sent to parents. The school accepted his apology and sent it out to parents. It looks forward to continuing its links with St Andrew's, including holding its carol service there this Christmas."

According to one version of the legend, Saint Nicholas lived in south-west Turkey in the fourth century and performed a number of miracles involving sailors and children.

One legend claims that during a terrible famine a malicious butcher lured three little children into his house, where he killed them, cured them in a barrel and planned to sell them. Saint Nicholas, who was visiting the region to care for the hungry, resurrected the three boys from the barrel by his prayers.