A decision by the West Australia Opera company to drop Carmen because it features smoking has left its fans and Tony Abbott, the Australian prime minister, fuming about “political correctness gone crazy”.

The state-owned opera company is ditching George Bizet’s masterpiece from its repertoire under a A$400,000 (£220,000) two-year partnership with Healthway, the state government health promotion agency, starting in March.

Carmen, set partly in and around a cigarette factory where Carmen works, has been dropped from the opera company’s schedule and will be replaced with a different opera for the 2015 season. Carolyn Chard, West Australian Opera general manager, said the company had voluntarily made the change in line with Healthway’s policies, and the agency said it did not make the request.

“We care about the health and wellbeing of our staff, stage performers and all the opera lovers throughout WA, which means promoting health messages and not portraying any activities that could be seen to promote unhealthy behaviour,” Chard told the West Australian newspaper.

The opera’s first act takes place in a Seville square outside a cigarette factory, and features smoking in the setting, action, direction and the libretto, or text. Rosanna Capolingua, the chair of Healthway, said her board was “quite surprised” by the offer of a Carmen ban.

“They brought that to us and we said: ‘Fine.’ It was their choice and their decision,” she said. “People are very aware of the glamorisation and depicting of smoking in the movies which is making a big comeback at the moment mainly because tobacco companies are encouraging that.” Capoligua said she believed the Perth-based company had wanted to ditch Carmen next year because its preferred lead singer would be performing Aida with Opera Australia in Sydney.

She said smoking remained the single most preventable cause of chronic disease and early death. “The portrayal of smoking on stage, in film and on TV normalises smoking and presents it as being attractive, which could dissuade smokers from quitting and encourage young people to take it up,” she said. “In addition, new trends such as smoking electronic cigarettes may re-establish smoking behaviour in our community where the majority of people are non-smokers.”

She said Healthway now banned electronic cigarettes as part of its minimum health policy requirements, which meant they could not be smoked at any event it sponsored.

Abbott, however, has ridiculed the deal as “political correctness gone crazy”.

Opera is “an exaggeration and if we are running around looking to take offence or looking to spread some politically correct message, just about every opera would be forbidden”, he told Melbourne Radio 3AW.

“We don’t stop the theatre from running ‘Macbeth’ because it promotes killing kings,” Abbott said.