Princeton University has reversed a policy that had sharply constrained the funding of academic research by fossil fuel companies, after pressure from faculty members and concerns that the rules risked hindering work on environmental challenges.

Environmental campaigners criticised the move as Princeton had gone further than most of its peers in moving to divest oil, gas and coal groups from its endowment and “dissociate” its research from fossil fuel company funding.

In a letter to its academic staff first reported in the student newspaper, three senior university officials said the rules Princeton adopted just two years ago ‘adversely and inequitably affected scholars whose research programs are addressing pressing environmental problems’.