A number of female comedians such as Shappi Khorsandi and Sarah Millican, who was a runner-up of the competition in 2005, used Twitter to express their disgust at Funny Women's decision to charge potential competitors £15 to enter.
Millican encouraged wannabe comedians not to pay the entry fee, saying that instead they should "be funny, write loads and work very hard". Khorsandi said that they were better off buying "a new hat" rather than paying "to enter a competition".
In response to the two stars, Funny Women boss Lynne Parker then wrote a blog post accusing Millican and Khorsandi of having a "knee-jerk reaction". She later took it down and apologised.
Parker has since told BBC News that she is "reviewing the situation" and will concentrate on "positive" responses in the future.
Since the row, a group of comedians including Bethany Black, Jane Hill and Ashley Frieze have set up a rival competition called 'Funny Females'. It will reportedly run in June.