Gordon Brown’s speech outlining federalism as part of the debate on independence sparked a row with opposition councillors.
They say it politicised an event which the local authority supported with just under £5000 of public money.
Councillor Marie Penman raised concerns when the application was made.
“The festival’s programme seemed to be dominated by Labour party speakers, but when I mentioned this to my fellow area councillors, I was assured that this was a non-political event, and was all about promoting the legacy of Adam Smith.
“Gordon Brown ... effectively used the platform to give an anti-independence press conference.”
Cllr Penman, supported by other non-Labour councillors, stressed that while she supported the idea of the festival as a way of promoting the work of Adam Smith, it was important that this was done in ‘a fair and non-partisan manner’.
But Marilyn Livingstone, chair of the Adam Smith Global Foundation, said that although the charity had applied for funding, in the end they didn’t need it and the application was not processed.
“We didn’t get any money from Fife Council, she said.
“We had applied for a £5000 underwrite in case we couldn’t raise all the money we needed to put on the festival, which is quite common.
“But we never got a response. We never heard back from them so we assumed that we weren’t getting the money.
However, we wouldn’t have had to take up the funding anyway as we managed to raise the all the money we needed through other income streams.”
Ms Livingstone also refuted any allegations of a “Labour love-in”.
“There were no serving politicians at the event,” she said.
“Gordon Brown has always helped with the Adam Smith Lecture. There has been a wide range of speakers over the years. We had people like Kofi Anan come to our town, specifically because Gordon Brown asked them.
“Ed Balls made it very clear he was there in a non-political way. He talked about Strictly Come Dancing and we had no complaints on the evening.
“We invited a range of people and those who came were those who could make it on that weekend.
“I would also stress this was called a Festival of Ideas and when it was organised, we had no idea there would be a call for a second referendum.
“We want to embrace all opinions and I think there was a wide range of opinions across the weekend. Any political points that were brought up mostly came through the Q and A sessions, so really, I think this is just nonsense.
“The foundation is absolutely not political and it’s proven that through everything it’s ever done.”