Over 1,000 men and boys march through the streets of Lerwick during the Up Helly Aa parade every January, before hurling their flaming torches onto a Viking longboat.
However, the event continues to exclude women from joining the procession - despite stories of female warriors in Viking folklore.
Protest group Up Helly Aa for Aa asked Shetland Islands Council (SIC) for help to convince organisers to allow women and girls to take part – as they are in other Shetland communities.
But they were left furious when the local authority deemed the decision was in line with the Equality Act 2010.
The row initially flared after campaigners complained about the council decision to allow the ‘jarl squads’ – the teams of ‘warriors’ – to visit schools and open up facilities controlled by the authority for the festival.
A civic reception is also held for the marchers.
A statement by the campaign group read: “As a consequence of both committees refusing to engage with us, we wrote to SIC to ask if we could work collaboratively with them to encourage an end to this discrimination and confirm their commitment to their public sector equality duty.”
“Up Helly Aa for Aa did not submit a complaint to SIC. SIC instead chose to initiate a complaints process. We are disappointed that SIC has instead triggered this more formal complaints process.”
It continued: “We look forward to any such legal advice resulting from this investigation being published quickly in the interests of fair and transparent government and to SIC’s commitment to its freedom of information duties.”
SIC chief executive Maggie Sandison she was “satisfied” the council “acts and behaves appropriately,” adding: “While I understand the outcome may not be universally welcome, every complaint is taken seriously.”
Sally Huband, leader of the Up Helly Aa for Aa group, said: “We can no longer sweep this under the carpet.”
“The fact remains there are females in Shetland who wish to participate but who are being prevented from doing so solely because they are women or girls.”
The group also noted they had written to the organisers of the junior Up Helly Aa event after two Anderson High school pupils had their applications to join the parade rejected.
They said the junior committee did respond but only to confirm that they would not accept applications from girls.