A START-UP service that helped launch companies such as Pufferfish, maker of stage props used by pop band Coldplay and the Eurovision song contest, is to close.
Business and academic figures have reacted with dismay at the decision to shut the Edinburgh Pre-Incubator Scheme (Epis) which will halt next month after Scottish Enterprise withdrew its funding.
Aside from Pufferfish, which makes spherical displays, other notable successes from Epis include, Burdica Biomed, which earlier this year signed a distribution deal with Chinese giant Sinopharm, and waste water manager H2Ology.
Entrepreneurs who are currently using Epis - which provides mentoring, academic partnerships and workspace - will complete their 12-months' of support before being passed on to the university's incubator service.
Scottish Enterprise said it is exploring ways to create a Scotland-wide version of Epis and would put interim measures in place in the meantime to support entrepreneurs.
But Patrick Andrews, business development manager at Strathclyde University and one of the Epis mentors, said: "I'm disappointed that no way has been found to enable Epis to continue.
"There are companies that are now creating jobs and paying taxes that wouldn't have been there if it wasn't for Epis."
Andrews expressed surprise at Scottish Enterprise's plans to replace Epis with a broader pre-incubation scheme.
He added: "If they couldn't find the money to keep Epis going then where will they find the cash for a Scotland-wide scheme?"
Iain Robinson, H2Ology's managing director, said it was "vital" for entrepreneurs to access services like Epis.
He said: "Epis benefited significantly from (programme director] Adrian Smith, who was a great support and delivered invaluable advice on the lessons he had learned in business.
"It's crucial that the new set-up is also led by an inspirational figure who can share his experience to support the growth of SME business start-ups across Scotland."
Grant Wheeler, head of company formation and incubation at Edinburgh Innovation and Research, the university's business start up arm, said other services would continue.
Wheeler highlighted the work done through Launch.ed, the university's programme to help staff and students start businesses, as well as the Scottish Institute for Enterprise and Informatic Ventures, which focuses on high-tech firms.
A spokeswoman for Scottish Enterprise said it hoped to have proposals in place for a national pre-incubation scheme by the end of the year and that setting up a service was a "priority".
She said: "We are still working with universities across Scotland, and Edinburgh University in particular remains a major partner on projects like Prospekt, BioQuarter Commercialisation and Proof of Concept, all of which play a pivotal role in realising commercial success."