McMaster University's experiment with hosting a controversial language and culture school sponsored by China's government is over.

The university will shutter its Confucius Institute this summer, severing a five-year relationship with Hanban, the Chinese government agency that has hundreds of similar outposts around the world and 11 others across Canada.

McMaster will pull the plug when the current contract, which is up for renewal, expires July 31.

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The decision to abandon the partnership comes in the midst of a human rights complaint against McMaster from a former teacher at the institute.

It was sealed by concerns over hiring practices – reported last year by The Globe and Mail – that appeared to prohibit teachers Hanban hired and sent abroad to staff the schools from having certain beliefs.

The closing is a black mark on what's been called China's global soft-power "charm offensive." Confucius Institutes, a key component, are regarded warily by academics and intelligence officials alike.

"It's really around the hiring decisions, and those decisions were being made in China," said Andrea Farquhar, McMaster's assistant vice-president of public and government relations.

"We were uncomfortable, and felt that it didn't reflect the way the university would do hiring."

McMaster's Chinese partners replied with a letter expressing "some disappointment," Ms. Farquhar said.

Chinese authorities have maintained Confucius Institutes are harmless, designed as a "a bridge reinforcing friendship and co-operation between China and the rest of the world" through teaching the Chinese language and culture.

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But Sonia Zhao, who came to Canada to teach at McMaster's institute in 2011, says she is pleased.

Ms. Zhao quit her post a year later, then complained to the Human Rights Tribunal of Ontario that McMaster was "giving legitimization to discrimination" because her employment contract forced her to hide her belief in Falun Gong, a spiritual movement the Chinese government deems dangerous.

She plans to attend mediation with the university next week.

A copy of Ms. Zhao's contract, signed in China and obtained by The Globe, warns teachers "are not allowed to join illegal organizations such as Falun Gong," and Ms. Zhao said she was trained in Beijing to dodge sensitive topics in class.

"This is very big news, it's very encouraging," she said on Thursday of McMaster's decision.

"I hope other universities and colleges could take similar steps."

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Since 2004, more than 300 Beijing-financed Confucius Institutes have opened worldwide, most of them inside universities and colleges.

Hanban bankrolls teachers and course materials, often with hundreds of thousands of dollars, while Canadian universities and colleges typically provide classrooms and administrative support – a deal many cash-starved schools have gratefully embraced.

The University of Waterloo sees no issues with its own Confucius Institute.

"We don't know anything about the contract that [Hanban] force their teachers to sign," said Glenn Cartwright, principal of Waterloo's Renison University College, which houses the institute.

"I'm sure they have some conditions, but whether we can dictate what those conditions can be is another story."

Other schools, such as the University of Manitoba, have declined overtures to open their own Confucius Institutes.

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McMaster spent months making "a concerted effort" to save the partnership, but never got the assurances it needed, Ms. Farquhar said.

"We have a very clear direction on building an inclusive community, respect for diversity, respect for individual views, and the ability to speak about those."