Malcolm called the agency "complete knobs", while Neill said it made New Zealand "look bloody stupid".
Their comments come after a highly-critical letter by University of Auckland English Emeritus Professor Michael Neill to the agency's chief executive, saying the cut in funding of the annual school Shakespeare festival was "highly questionable" and "ill-considered".
"With respect , if you decide to cancel the greatest writer in English, or any language come to that, you sound like a f***ing idiot. And you make NZ-Aotearoa look bloody stupid," Sam Neill said.
For the past decade, Shakespeare Globe Centre NZ has received about $30,000 per year for the festival from Creative NZ.
In a funding assessment document, the Creative NZ board raised worries the festival "did not demonstrate the relevance to the contemporary art context of Aotearoa in this time and place and landscape".
"What complete knobs," Malcolm said.
"I've judged the Sheilah Winns at the local and national level. I've followed a number of kids over the years as they've travelled to the Globe in London as part of winning the national final and subsequently gone on to professional careers as actors and directors.
"I've taught Shakespeare performance in school to kids right across the social and cultural demographics.
"This is about kids, their own creative force and theatre. No matter what the school or the kids they all respond the same. They love it and they take ownership of it for themselves."
Malcolm said the decision to defund was "beyond short-sighted, reactionary and just plain dumb."
Hurst agreed with Malcolm, saying she had "hit the nail on the head".
"Lifting kids out of themselves, harnessing their own force to something that carries way beyond the mundane and transcends cultural boundaries rather than limiting or suppressing them," Hurst said.
"For heaven's sake, we're surely beyond parochialism in this inter-connected world. No one denies the benefits of developing our own stories, but this is ridiculous."
New Zealand First leader Winston Peters also weighed in on the debate, posting on Facebook that what the defunding "really means" was that "these overpaid sickly liberal bureaucratic wokester morons, have decided that 'colonial' Shakespeare doesn't fit the current political cultural and social engineering programme being rammed down our throats".
"For centuries countless countries around the world have respected Shakespeare and the learnings and culture it brings to society," Peters said.
"Now we have these cultural Marxists in our country attempting to cancel anything that threatens their delusional ideology. What is New Zealand turning into?"
ACT leader David Seymour said the funding cut had made NZ a laughing stock on the world stage.
The decision by Creative NZ made headlines in major metropolitan English newspapers The Guardian and The Daily Telegraph, along with the The Irish Times.
"The UK and Australia are reporting in disbelief that NZ is cutting funding for Shakespeare's works because of concerns of 'imperialism' and 'colonial views'," Seymour said.
"All cultures deserve respect in NZ, not just those that fit with the left's ideology."
Professor Neill, a Shakespearean scholar and elder brother of Sam, said in his open letter to Creative NZ chief executive Stephen Wainwright there was a rich history of Māori involvement with Shakespeare.
"The great Māori leader and scholar Pei Te Hurinui Jones translated Othello, Julius Caesar, and the Merchant of Venice: the last of these was published in 1946, and supplied the script for Don Selwyn's 1990s stage production of the play, which was later transformed into his ground-breaking film Te Tangata Whai Rawa o Weneti (2002)," he wrote.
"This, you must surely be aware, was the first feature film ever made entirely in Te Reo Māori."
Neill said while Shakespeare "may once have been expropriated as an instrument of colonisation", his work had become a "weapon of decolonisation".
He said Creative NZ needed to recognise and honour the true history of Shakespeare in Aotearoa.
"Reversing its ill-considered defunding of the Sheilah Winn Shakespeare Festival would be a start."
Creative NZ has been contacted for comment.
