“Some weeks ago Shane quit from his role as film reviewer when the magazine refused his demand to include a racial slur in an earlier piece. He saw this as censorship,” Williams wrote to staff, in a Slack message seen by this masthead.

Danielsen said it was wrong to represent his use of the N-word in the article as a racial slur, given the context of the film.

“White liberal discomfort with that term is precisely the point of the scene I was discussing; to then succumb to it, seemed kind of ridiculous,” Danielsen told this masthead.

The American Fiction email exchange includes Williams saying: “I sincerely hope [and believe] that disagreement on this should not be resigning material, and have my fingers crossed that a solution can be found.”

Danielsen then apologised for threatening to resign, admitting he “overreacted”, with Williams telling him it was a “worthwhile topic to get exercised about, even if we reached somewhat different conclusions”. He added he was looking forward to reading his Berlin reports.

Danielsen suggested the decision to not publish his report was influenced by Schwartz Media’s alleged reluctance in covering the politics of Israel and Palestine, rather than a direct result of the pair’s discussion over his resignation.

“Why did he refuse to run a piece he’d commissioned – albeit one that touched upon a subject [the conflict in Gaza] which both the magazine and its sister publication had assiduously avoided covering? A piece which, by his own admission, he keenly awaited? And the answer to that question keeps changing.”

Williams said the decision to accept Danielsen’s earlier resignation was unrelated to the Berlin article.

“The decision was not a response to his report from Berlin Film Festival,” he said.

“I reject Shane’s characterisation of the company’s coverage of Gaza. The conflict has been covered extensively in The Saturday Paper, on 7am, and every day in our morning newsletter Post.”

The Berlin Festival piece was published on Friday by London Review of Books, with a note it had been rejected by its commissioners at The Monthly.

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Staff across Schwartz titles have expressed displeasure over the company’s coverage of Hamas-Israel war in the past. It has created tensions for owner and publisher Morry Schwartz, who is Jewish and the son of Holocaust survivors.

About 10 staff across its titles signed a letter in November urging better coverage of the conflict in Gaza. Some staff members from this masthead were also signatories of the letter.

Schwartz later said internal opposition to coverage of the Gaza conflict did not play a role in the timing of his decision to step down as chair in December.

Despite perceptions, Schwartz said in October no one knew his thoughts on the historical conflict.

“It’s highly complex, and highly emotional subject,” Schwartz said. “My life is private, and I keep it that way. I don’t think anyone really does know my positions. They’re complex.”

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