More than 30 students from Edinburgh University staged a sit-in after the university continued its investment in fossil fuels.
On Tuesday, students heard of the news that the institution they attend and pay money to rejected calls to cut investment in companies that produce fossil fuels.
The decision was met with shock and anger by students who said divestment pleas were received with "overwhelming support" during the consultation process.
As a result of the university's stance on the matter, a small section of students are occupying an administration building in Chambers Street, home to the university's finance department.
The students said the university invested £9m in fossil fuel companies including BP, Shell and BHP Billiton.
Kirsty Haigh, student campaigner with Edinburgh People and Planet, said: "Despite the overwhelming support for fossil fuel divestment in a public consultation, the university have proved they are in the pockets of the fossil fuel industry."
"Climate change is the most urgent threat the world is facing, and Tuesday's announcement tells us the university is not taking it seriously enough," she added.
The decision brought to an end a three year battle for full divestment, which students say had full support throughout from students, staff and alumni. The university's status as a leader in sustainability is now being called into question.
A Fossil Fuels Review Group is being established by the university to look further into the issue.
University officials have said its choices had not been limited to no change or pulling out of all investments.
It also stressed it would use its research activities and "responsible investment" positively to work with companies to reduce their emissions.
They said: "The university will focus specifically on companies involved in the extraction of the highest carbon-emitting fossil fuels, coal and tar sands."
"We will divest from these companies if realistic alternative sources of energy are available and the companies involved are not investing in technologies that help address the effects of carbon emissions and climate change."
Student protesters are being supported by the university to exercise their frustrations lawfully and peacefully.Suggest a correction