Malcolm Fraser and John Hewson have signed an open letter backing an Australian National University decision to divest its fossil fuels portfolio.

In a full page ad in the Canberra Times, 50 prominent Australians and ethical investors, including former Liberal prime minister Fraser, former Liberal leader Hewson and businessman Graeme Wood, put their names to the open letter supporting the ANU.

“We cannot understand why a government that is committed to deregulating the university sector would question the ability of a university to make investment decisions,” the letter says.

The university has announced its offloading holdings in Iluka Resources, Independence Group, Newcrest Mining, Sandfire Resources, Oil Search, Santos and Sirius Resources for ethical reasons.

The decision represents one per cent of the university’s total investment holdings.

Treasurer Joe Hockey and Education Minister Christopher Pyne have criticised the move.

Hewson warned against bullying from vested interests.

“The mining industry has bought this government like it bought the last one,” Hewson told ABC Radio.

The Liberal Party was supposed to stand for freedom and individual choice.

“It’s a totally unjustified intervention by government,” he said.

“If I was a superannuation fund manager I would wonder how long it would be before they start instructing us where we should invest our money.”

The South Australian Government has also attacked the ANU over the decision.

Treasurer Tom Koutsantonis said yesterday that the ANU’s decision represented a return to the “dark ages”.

“The ANU prides itself on being a celebrated place of intensive research, so to base this decision on nothing more than a symbolic, box-ticking exercise, is humiliating for an institution of this kind,” Koutsantonis said.

READ MORE: Koutsantonis says university in “dark ages”

– with AAP