One of the UK’s oldest independent cinemas has ditched plans to hand over control to a commercial operator following a backlash from thousands of supporters, including film directors and musicians.

The Phoenix cinema in East Finchley, north London, had been due to have its operations and programming taken over by the Curzon cinema group, raising the possibility the venue would lose its “unique identity and much-loved atmosphere”.

The film directors Mike Leigh and Ken Loach, Led Zeppelin’s Robert Plant and the comedian Michael Palin were among thousands of people who had publicly protested against the proposed handover.

On Friday, the Phoenix Cinema Trust said it had listened to what staff and others had said and had agreed with the Phoenix management not to go ahead with the Curzon partnership.

“This will involve more fundraising, together with making sufficient changes in how the cinema is run so that its trading income can cover its running costs,” the trust said in a statement.

“Staff in particular have strongly opposed any plan which means that the Phoenix is not operated independently. Their view is supported by many in the film industry, including some Phoenix patrons.

“Reactions within the community have been more mixed, with many people recognising that major changes may be necessary to keep the cinema open, but many are keen to see the Phoenix remain independent.”

The trust said it would try to avoid job losses but it had told staff this could not be guaranteed.

It said several years of unprofitable trading and the risk of insolvency had led the trust to consider different ways of breaking even. However, the manner in which the trust went about the proposed changes angered local people and patrons.

The campaign group Save the Phoenix welcomed the decision, and said “a cinema run by the people for the people is an institution worth preserving”.

It added: “The outpouring of support for the cinema has shown how many people care about its future, and we want to turn that support into a better and brighter future.”

The Phoenix’s management said they were pleased with the decision and hoped it would be a turning point for the cinema’s strategy, as well as board and staff relations.

“We have been overwhelmed by the support we have received from the community and would like to thank everyone,” they said.

“We will do our very best to ensure the Phoenix can have a sustainable future as an independent community cinema.”

Robert Kenny, director of cinema development at Curzon, said “Our primary concern at Curzon is supporting a vibrant, diverse and healthy film culture.

“Phoenix cinema is a much-loved venue and longstanding trading partner. We hope that the staff and patrons of the Phoenix understand that our interest is in the ongoing success of the cinema.”

The independent arthouse cinema was built in 1910 and opened in 1912 as the East Finchley Picturedrome, making it one of the oldest running cinemas in the UK and London’s oldest independent community cinema. It has been run as a charity by a board of trustees since.

It later operated as the Coliseum and then as the Rex, before becoming the Phoenix in 1975.