The major Australia Day event has been canceled due to sensitivities surrounding the national day celebration

Anthony Albanese's high commissioner to Britain has scrapped the annual Australia Day fundraiser, citing “sensitivities” over the controversial holiday.

Stephen Smith, Australia's most senior diplomat in Britain, has ended the popular Australia Day gala dinner held annually for the past two decades at the Australian High Commission's marble-clad Exhibition Hall on the Strand on the Saturday closest to January 26th.

The black-tie night, run by the non-profit Australia Day Foundation, has previously attracted some of Australia's biggest exports, including singers Kylie Minogue, Natalie Imbruglia, Tim Minchin and entertainer Barry Humphries and presenter Clive James.

This was said by a spokesperson for the High Commission of Australia The Sydney Morning Herald it was 'common knowledge that Australia Day affects the sensitivities of some Australians'.

The black-tie night, run by the non-profit Australia Day Foundation, has previously attracted some of Australia's biggest exporters, including singers Kylie Minogue (pictured at the 2015 event), Natalie Imbruglia, Tim Minchin and entertainer Barry Humphries and broadcaster Clive James

“The High Commissioner is pleased to acknowledge that this was part of the decision-making process regarding the various alternative dates proposed by the foundation,” the spokesperson added.

Sky News presenter Rita Panahi slammed the decision, claiming it was 'pathetic but sadly predictable anti-Australian BS from an Albanian appointment'.

Mr Smith told organizers it would not be appropriate to hold the 2024 event around January 26, which marks the landing of the First Fleet in Sydney in 1788.

Australia's High Commission reportedly wanted to charge the charity £29,000 ($55,000), impose an 11pm curfew and suggest the event take place in March.

Phil Aitken, founder of the foundation, told the newspaper that the lack of support for the event after 20 years was “very sad”.

“I was very disappointed when I was told it was not appropriate to hold a gathering around Australia Day that could be interpreted as insensitive in Australia,” he said.

Mr Smith (pictured outside 10 Downing Street) was believed to be the Prime Minister's third choice for the role of ambassador as the government struggled to fill the post for almost a year.

Advertising titan Bill Muirhead, who was also a founding member of the foundation, branded the decision as 'un-Australian'.

“Last time I checked, January 26 was still Australia Day,” Muirhead told the newspaper.

The event has made profits in recent years, which have been used to fund scholarships for Australians to study in Britain.

Opposition foreign affairs spokesman Simon Birmingham called on the federal government to reverse Smith's decision.

“It is not the job of a high commissioner to unilaterally change the date of Australia Day,” Birmingham told the newspaper.

“Stephen Smith not only looks like a spoilsport who is ashamed of Australian history, but he is also destroying an important event that promotes investment, travel and trade with Australia.

“Penny Wong and Don Farrell must put aside this ridiculous decision, which burns the goodwill and reputation of an event built over many years by proud expats who enjoy spending their time promoting our nation.”

Mr Smith was believed to be the Prime Minister's third choice for the role of ambassador as the government struggled to fill the post for almost a year.

Earlier this year he stoked controversy when he said it was “inevitable” that Australia would become a republic and remove King Charles as head of state.

Mr Smith served as Defense Secretary and Foreign Secretary under the Rudd and Gillard governments before retiring from frontline politics in 2013.