A rightwing “national security organization” with a history of anti-Muslim extremism has scrapped plans for a lavish $1,500-a-head gala dinner at Donald Trump’s Mar-a-Lago resort in Florida, after a backlash from civil rights groups.

Act for America, whose founder, Brigitte Gabriel, has boasted of weekly meetings at the White House, booked Trump’s Palm Beach retreat for its annual dinner on 7 November, with the conservative author Michelle Malkin as keynote speaker.

But after accusations from civil rights advocacy groups, including the Southern Poverty Law Center (SPLC) and the Council on Islamic American Relations (Cair), that the president was “profiting from bigotry”, the Trump Organization abruptly pulled the plug on the event at the weekend.

“This event will absolutely not be taking place at Mar-a-Lago,” the New York Times reported, quoting an unnamed Trump spokesperson who did not elaborate on the statement.

Wilfredo Ruiz, communications director for Cair’s Florida chapter, welcomed the cancellation. “Act is a group that believes Islam is a cancer on America, they have no place in a civilized society,” he said. “It’s a hate group operating on the fringes of society stepping up to use the president’s Florida residence as a platform.”

In a statement, Cair’s national executive director, Nihad Awad, said: “No individual, organization or public official should profit from bigotry. [We] urge other potential venues nationwide to consider the group’s history of Islamophobia and associations with white supremacist and racist organizations.”

Act did not respond to a request for comment, but in a statement to the Guardian, Malkin attacked “a chilling ‘cancer culture’ campaign being waged against patriotic journalists and activists – and apparently not even Mar-a-Lago is a safe space”.

“The SPLC and CAIR seek to silence and eliminate political opponents by redefining criticism of their agenda and tactics as ‘hate’,” she said.

Act’s website claims it is the nation’s “largest and most influential national security grassroots advocacy organization”, with more than a million members. Its mission statement asserts: “Anyone who traffics in prejudice, or advocates violence in any way towards anyone does not speak on behalf of ACT for America.”

Yet the SPLC has branded Act “the largest anti-Muslim group in America”, which organized a controversial and often violent nationwide series of Marches against Sharia in 2017 that attracted neo-Nazi and other extremist sympathizers.

Trump made more than $22m from Mar-a-Lago in 2018, federal disclosures showed, raising ethics concerns. It represented a $3m drop in revenue from the previous year but was still a healthy personal profit from a property the president likes to call his “southern White House”.