Sydney's popular arts festival Vivid Sydney has been drawn into a fresh censorship controversy after it emerged that one of its venues had covered up some nude photographs with tape.

The genitals of three naked people, in two images, were covered at the interactive exhibition Home, at the Cleland Bond Building in The Rocks, despite warnings of nudity at the entrance, according to one of the photographers featured. The exhibition is part of Vivid and its joint festival Reportage.

Reportage curator Stephen Dupont said the public were being treated like "morons", "idiots" and "a bunch of naive people".

The row follows the removal of pictures from 18 of the 35 world-renowned photographers, including James Nachtwey, Jodi Bieber and Conor Ashleigh, from two large screen projections near the Museum of Contemporary Art at Circular Quay.

Two photographers have withdrawn their work in protest, and Dupont says it will "probably lose more".

Dupont told Guardian Australia he put the tape over the images at the request of the Sydney Harbour Foreshore Authority.

A spokesman for the authority, which manages the Cleland Bond Building, said it did not specifically ask for the images to be covered up.

"As the Cleland Bond foyer display is freely accessible by the public as well as tenants' staff and visitors, Sydney Harbour Foreshore Authority asked Reportage to consider options to ensure the exhibition content remained suitable for the broadest possible audience," he said.

But Dupont insisted: "The Sydney Harbour Foreshore Authority personally came down to me on Friday or Thursday ... and instructed me to put tape on the genital parts of two images."

"I said, 'Do you want me to put tape on this?' and they said 'Yes, that would be good'."

Dupont said he then called the photographer Andrew Quilty, who is part of the Oculi photography group, which is showing Home.

"We agreed amongst the Oculi group today that we're going to remove the tape and say that we don't want our exhibition to be compromised," Quilty said. "It's all or nothing as far as we're concerned."

The gallery was open again on Monday, with no tape over the photographs. But Dupont was frustrated the request was ever made.

"Who do they think the general public are? a bunch of morons? A bunch of naive people who don't know what's going on in the world? They're treating the public like they're idiots."

Destination NSW chief executive officer Sandra Chipchase said there had been some "miscommunication" on the censorship allegations relating to the outdoor screen.

"The general public will be able to see all photos and all videos as part of Reportage. There is no censorship of the material - it is fully available to everyone."

The photographers did not learn of the decision until Thursday, which is when Chipchase says she first saw them. But Dupont said Destination NSW had been going through the images "on a very slow basis" since Tuesday of last week.

"Why was it done at the last minute? Probably a lack of communication. We should have had meetings months ago. But there's no excuse - we have toed the line, we have worked in collaboration at such a tight level. It's a bad reflection on us. I have to report to the photographers."

Destination NSW are the owners and managers of Vivid Sydney. Chipchase said it had a responsibility for the public domain and Vivid was a family-friendly festival.

"We had a contract. In that contract we have the right to approve images. There were several images that we thought that would be too distressing or offensive to people and as a consequence we asked that those be removed."

"It appears that some of the photojournalists were not informed that we had this right, so naturally they've become upset because not all of their material is on the screen," she said.

"If these provisos haven't been communicated to the photojournalists, that's perhaps an issue for the organisers of Reportage."

Quilty's photo essay containing images of bushfire aftermath was among those deemed distressing.

"I don't know what they expected to come from a festival that shows specifically photojournalism," Quilty told Guardian Australia.

"I don't know if they were expecting photos of cats and what the photographers were eating for breakfast. It seems to be coming from a typical kind of ad-person who has a view of how they want their brand to be perceived."