A documentary that lifts the lid on a “race science” network of far-right activists in Britain and its links to a rich American funder of eugenics research has been pulled from the London Film Festival (LFF) at the last minute due to safety concerns.

The organisers have taken the “heartbreaking decision” to cancel the planned screening of the “exceptional” Undercover: Exposing the Far Right this weekend due to fears about the welfare of audiences, staff and security working in the festival venues.

Havana Marking, the director of the film – which made headlines last week for identifying the backer of research into so-called race science and highlighting the racist views of former London mayoral candidate Nick Scanlon – has criticised the decision to pull the premiere as “a very unfortunate outcome”.

“I understand the festival need to look after their staff, but I am furious that our film has lost a planned theatrical release so late in the day,” she said. “We were told the LFF felt they could not show it due to security issues. I do feel, though, that the power of the far right is exaggerated, although their influence is clearly dangerous.”

Speaking to the Observer, Marking said she was worried about the climate of fear created by recent far-right riots in Britain in the wake of the killing of three children in Southport.

“We did try to put forward alternative ways to show the film, when they came to us,” she said. “But the riots have made people so scared. I am trying to think of it as a reflection of the powerful content of the film, but it is getting harder to make documentaries with political content, and if they are not guaranteed a screening it really does not help.

“At least the film will go out on Channel 4 on Monday. And in fact, both Channel 4 and the British Film Institute, the body behind the film festival, have actually been incredibly supportive of this film.”

Kristy Matheson, the director of the festival, said the decision to cancel the screening had been due to worries about staff not feeling secure.

“After exploring all the viable options to screen this film at a public film festival we took the heartbreaking decision to not present Undercover: Exposing the Far Right at the LFF,” she said. “I think the film is exceptional and easily one of the best documentaries I have seen this year. However, festival workers have the right to feel safe and that their mental health and well being is respected in their workplace.

“I took on board the expert opinion of colleagues around the safety and wellbeing risks that the screening could have created for audiences and the team and that informed our decision, which we did not take lightly. The film is incredibly important and we wish it the very best.”

The fly-on-the-wall documentary follows investigators from the organisation Hope Not Hate as they track down members of violent and bigoted far-right factions who are planning demonstrations and intimidation campaigns. It also unmasks the British far-right activist and former private school teacher Matthew Frost, also known as Matt Archer, and his connections to the Seattle-based multimillionaire Andrew Conru.

Marking said she had filmed with Hope Not Hate for two years. “Of course, the story kept changing, and at the end the riots happened in Britain. At first, we believed this just made the film more relevant. It is true, of course, that far-right activists like Tommy Robinson do pose a threat, particularly to members of Hope Not Hate, but it is sad if their actions have had this impact.”

The documentary focuses on the work of the Human Diversity Foundation, a group which uses podcasts, videos, websites and research papers to argue for the genetic superiority of certain ethnic groups. It received more than $1m from Conru, who made his money from dating websites. He has pulled his support following reporting in the Guardian, saying it had deviated from its original mission of “non-partisan academic research”.