The Melbourne International Comedy Festival will look to pay tribute to Barry Humphries, but is standing by its decision to rebadge the entertainment legend’s namesake award.

Humphries died on Saturday at St Vincent’s Hospital in Sydney following complications from hip surgery stemming from a fall earlier this year. He was 89.

Since his death, friends including collaborator Bruce Beresford and British-Australian entertainer Miriam Margolyes labelled the festival a disgrace for not properly celebrating the feted performer, who helped start the annual event.

The festival joined the chorus of local tributes to the revered comic but did not organise an official tribute for the final day.

Humphries delighted and outraged audiences for more than half a century and was a founding patron of the festival, leading to it name its annual prize for most outstanding act after him in 2000.

But an outcry over a series of comments widely seen as transphobic prompted the renaming of the festival’s top gong in 2019.

Festival director Susan Provan on Monday stood by the decision.

“In 2019 we did change the name of our top award from the Barry to the Most Outstanding show – this was in response to transphobic comments he made publicly that lacked empathy and baffled many in our industry. We did not ‘cancel’ him,” she said.

The award for most outstanding show was renamed to reinforce the equality and diversity the festival community has always championed, Ms Provan said, and some of the values Humphries espoused in later years did not reflect more contemporary industry values.

“Yesterday was the final day of our 26-day festival. We were extremely saddened to learn of the passing of Barry Humphries on Saturday night, but with over 300 shows to stage on Sunday the show had to go on,” Ms Provan said.

“We acknowledge that he deserves an appropriate tribute, we will now take time to consider what that might be.”

Film director Beresford told ABC Radio Melbourne stripping his friend’s name from the festival award was offensive and insulting.

“It’s a disgrace what they’ve done, I mean he’s one of the greatest comic geniuses ever,” he said on Monday.

“Barry was in many ways a social commentator – he was really commenting and giving a view on incidents in the world around him, which is what he’d been doing all his life, but … I don’t think he was malevolent or malicious.”

Margolyes called on festival organisers to “sharpen up”.

“How dare they. He had more talent in his little finger than they did in their whole bodies – all of them. I’m outraged by it and I want to speak up now to support him. It’s not about transgender (issues),” she told ABC TV.

Margolyes said she didn’t agree with her friend’s politics – a fact she told him to his face – but she still appreciated Humphries as “the greatest comic who ever lived”.

“I didn’t like his politics. I really didn’t. But I revere the talent of the man,” she said.

“It was coruscating; it was all-enveloping. And if people can’t see that, they need something shoved up their bum.”

Irish comedian Dylan Moran paid tribute to Humphries in front of a packed audience on Sunday night.

The comments come as the family of the Melbourne-born comedy legend discuss the possibility of a state funeral with the Victorian government.

Creative Industries Minister Steve Dimopoulos said talks were under way with the entertainer’s loved ones about the best ways to honour his legacy.

A range of options are on the table, including a state funeral.