The Royal Shakespeare Company is to end its sponsorship deal with BP amid growing opposition to fossil fuel companies’ sponsorship of many of the UK’s leading cultural institutions.

The RSC announced that after months of deliberations and a vociferous campaign from artists, the public and environmentalists, it had decided to curtail its eight-year relationship.

The move will increase pressure on other cultural institutions such as the Royal Opera House, British Museum and National Portrait Gallery, which have all come under pressure over their tie-ins with fossil fuel companies.

Jess Worth, the co-director of the campaign group Culture Unstained, said the decision was “fantastic news” that signalled the end of fossil fuel sponsorship of the arts.

“The RSC has understood that a climate emergency means that business as usual cannot continue, and we congratulate them for showing leadership,” she added.

In a joint statement, Gregory Doran, the RSC’s artistic director, and Catherine Mallyon, its executive director, said the decision had been taken after a “careful and often difficult debate” internally.

They added: “Amidst the climate emergency, which we recognise, young people are now saying clearly to us that the BP sponsorship is putting a barrier between them and their wish to engage with the RSC. We cannot ignore that message.”

The sponsorship deal will conclude at the end of this year – more than two years early.

There has been growing criticism of fossil fuel corporations’ involvement in the arts over the past year as concern about the scale and severity of the climate crisis grows.

In February, hundreds of people occupied the British Museum to object to its relationship with BP, and in June several leading artists wrote to the director of the National Portrait Gallery on the eve of its annual awards, calling on it to end its links to the company.

Also in June, the Guardian revealed that Mark Rylance, who had been an associate artist with the RSC for 30 years, was resigning from his position, arguing BP’s sponsorship deal allowed the company to “obscure the destructive reality of its activities”, which he said threatened the future of the planet.

Last week, young people who had taken to the streets in huge numbers across the UK in the school climate strikes, said they would boycott the RSC unless it severed its ties with big oil.

The RSC statement said the growing opposition from young people had been a critical factor in its decision.

“Central to our organisational values, is that we listen to and respond to the views of young people. Each year we actively engage 500,000 children and young people with Shakespeare’s plays … It is with all of this in mind that we have taken the difficult decision to conclude our partnership with BP at the end of this year. There are many fine balances and complex issues involved and the decision has not been taken lightly or swiftly.”

The RSC thanked BP for its “generous support” since 2011, adding that the ticket scheme that the oil company subsidised for 16- to 25-year-olds had allowed tens of thousands of young people to see world-class performances.

In a statement, BP said it was “disappointed and dismayed” by the decision.

“We’re disappointed that this will bring a successful programme to a premature end. Over the past eight years our sponsorship has enabled 80,000 young people to see RSC performances at reduced rates,” it said.

BP added that it was dismayed because the oil giant shared “many of the concerns that apparently contributed to the decision”.

“We recognise the world is on an unsustainable path and needs to transition rapidly to net-zero [emissions] in the coming decades. The debate centres around how to deliver this whilst meeting the world’s growing energy demands … this global challenge needs everyone – companies, governments and individuals – to work together to achieve a low carbon future.”

Rylance welcomed the decision. “I credit this change of heart within the RSC to the good people working there and the young people who expressed so powerfully their love for the RSC and Shakespeare and their concern for the future – a love and concern I share wholeheartedly,” he said in a statement.

“Now, let us all hope that the good people within BP who are conscious of what an enormous difference BP could make in the world if it actually changed its ways and stopped blocking renewable energy, stopped investing in carbon extraction, stopped greenwashing its reputation and actually truthfully joined with the young people of Britain and lived up to their advertising as a ‘green’ company.”

BP also has ongoing sponsorship deals with the Royal Opera House, British Museum and National Portrait Gallery, which are now likely to come under further pressure from campaigners.

Activists said it was time for all major cultural institutions to follow the RSC’s lead and cut their ties with fossil fuel companies. “There is no longer any excuse for promoting a fossil fuel company in the middle of a climate crisis,” said Worth.