"They have endured significant challenges which are likely to intensify should the competition enter its second and third rounds," the RGE leadership committee said in a statement, saying they were "particularly concerned for [their] mental health and welfare".

But one of the semi-finalists, Tomas Parrish, said on social media they were “not bullied or harassed into making the decision to withdraw” from the competition, and stood “with the First Nations and POC community to create a more equitable and accessible industry”. They were meeting with the entertainment union’s Equity Diversity Committee before making a public statement.

Star of the original production of Wicked, Amanda Harrison, welcomed the cancellation announcement.

"It's admirable even though it's a real shame for the kids who would have worked hard to achieve that goal but I think it's good that the foundation has realised the error of their ways and will aim to do better next year," Harrison said.

Director Richard Carroll told Limelight Magazine the Endowment had to "acknowledge the unconscious bias we all carry".

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The Rob Guest Endowment Award is a $50,000 cash prize to be used for professional development. The runner up receives $5000 and the remaining four finalists get $1500 each.

RGE initially defended its choice of semi-finalists, saying "the only metric considered by our judging panel was talent", though it acknowledged it needed to "work harder at encouraging entrants from the BIPOC community".

However this response drew more angry comments on social media.

Vocal Art Studios, an award-winning music school in Melbourne, said on Instagram "the people on these panels [are] giving opportunities to those they know or those they're friends with".

In Friday's statement, RGE said its "initial response in August contained language that we should have known was offensive and we apologise unreservedly for any offence caused".

Earlier this week, after fielding queries from The Age and The Sydney Morning Herald, RGE issued a statement saying it accepted "unreservedly that the leadership committee should have done more to ensure that contestants in the competition were drawn from a much more diverse cross section of emerging theatre performers".

It apologised for its "omissions and failures" and announced it would move to have a minimum 20 per cent "BIPOC and diverse" representation in its leadership committee and judging panel, and a 20 per cent minimum of future semi-finalists would be "drawn from a diverse array of entrants including Indigenous Australians and people of colour".