"For politicians to try to bully, coerce and influence this university is just outrageous," Mr Hewson said. "The big story here is what got the politicians so stirred up? Was it the Minerals Council? It virtually owned the previous government and appears to have large influence over this one. "I'm surprised the superannuation industry isn't up in arms about government trying to tell institutions how they should invest. What if the big super funds were told they should be investing 25 per cent of their money into infrastructure, 30 per cent into government projects?" Assistant Infrastructure Minister Jamie Briggs last week called ANU "reckless" and Mr Hockey claimed the university was "removed from reality" for deciding to spurn companies that he said help drive the Australian economy and create jobs. On Monday, Mr Pyne called the divestment decision "bizarre" and Prime Minister Tony Abbott accused the ANU of "unnecessary posturing" and risking the returns to its $1 billion investment portfolio by selling off resources stocks.

Environment Minister Greg Hunt has spoken against ANU and novice Liberal senator James McGrath, a former employee of Santos, said the university had denied the seven companies "natural justice" by failing to engage them before blacklisting their shares. "You have a publicly funded organisation that essentially has chosen to blacklist companies without giving them the right of reply. I think the university should be condemned," he told Fairfax Media. On Wednesday, left-leaning think tank the Australia Institute will publish an open letter that calls on the government to respect ANU's right to invest in or divest from any investments that it chooses. "We support the role of choice in the Australian economy and cannot understand why a government that is committed to deregulating the university sector would question the ability of a university to make investment decisions," the letter states. "It is every investor's right to make their own investment decisions without bullying from vested interests and government ministers. It is ANU's obligation to invest responsibly, which includes thinking about their environmental social standards, how they impacts on financial returns and how they reflect on the character of the institution."

Among the people who have added their names to the letter are Wotif founder Graeme Wood, former Greens leader Bob Brown and philanthropist Rob Purves. The group said ANU's approach to ethical investing was consistent with investors around the world, including the Rockefeller Brothers Fund and Stanford University. Mr Hewson said the response had been disproportionate to the scale of the investment portfolio rejig by ANU. The shareholdings to be liquidated are worth an estimated $16 million, representing less than 2 per cent of the university's $1.1 billion portfolio. ANU vice-chancellor Professor Ian Young said it was worrying that certain groups felt they had the right to "tell an investor how to invest". Tim Buckley, a former head of equity research at Citigroup who now works at the Institute of Energy Economics and Financial Analysis, also accused the Coalition of attempting to bully ANU.

"I find it absolutely bizarre because, the last time I checked, investment managers have the right to change their portfolios," he told Guardian Australia. Santos vice-president for LNG markets and Eastern Australia Commercial, Peter Cleary, questioned the sense of the divestment movement's view that fossil fuels have no place in the future economy. "Our industry respects the challenge of minimising the impact of our activities on the environment but we don't agree with the extreme agenda that denies the continuing importance that energy plays in supporting the everyday lives of Australia and Asia," he said. Loading "We face misleading and scaremongering campaigns. As an industry, we must do all to inform our communities and to make sure the debate is based on the strong science around the risks and about robust economics when we look at the positive impacts on communities."

ANU is the first Australian university to divest from fossil fuels, although it has retained shares in BHP Billiton and Rio Tinto. In the US, 19 universities have sold out of fossil fuels investments, including Stanford University, which has cleaned out its $US19 billion ($22 billion) investment fund.