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Millionaire businesswoman Catherine Reynolds announced Monday she is withdrawing her controversial gift of $38 million to the Smithsonian Institution that was to have been used for an exhibition honoring achievers such as TV personality Martha Stewart and director Steven Spielberg.

The gift had sparked widespread protest. One group of 170 scholars complained that the achievers exhibition, which was to have taken up 10,000 square feet in the Smithsonian’s National Museum of American History, compromised the Institution’s intellectual integrity by allowing wealthy contributors to dictate the content of scholarly exhibits.

“Never in our wildest dreams did we anticipate that the notion of inspiring young people by telling the stories of prominent Americans from all disciplines would be so controversial,” Reynolds said in a letter to Smithsonian Secretary Lawrence Small explaining her withdrawal of funds.

Her turnabout is a defeat for Small, who had cited Reynolds’ and other large private donations among the major achievements of his two years as head of the world’s largest research and museum complex.

Small renamed the history museum the Behring Center in return for an $80 million gift from businessman and sports entrepreneur Kenneth Behring. Small also announced plans for the creation of a General Motors Hall of Transportation in the museum in return for a $10 million donation from the auto giant.

Neither Small nor Marc Pachter, the museum’s acting director, could be reached for comment.

Under the Reynolds’ gift agreement, the museum was to have created a “Spirit of America” hall of achievers, with honorees selected from nominations made by a 15-member screening committee. Reynolds, a Florida native who amassed a fortune in the college loan business, was to have appointed 10 of the 15 members.

She told reporters that Stewart, Spielberg, ice skater Dorothy Hamill and TV anchor Sam Donaldson were the sort of honorees she envisioned for the hall.

Curator staffers for the museum argued such an exhibition ought to explore all facets of achievement in America, including political, social and economic barriers to achievement.

The Smithsonian, which receives 70 percent of its budget from the government, had been targeted for $27 million in spending cuts by the Bush administration. But, in the White House budget announced Monday, it would receive a $12 million increase.