Dow Chemical is to remove its branding from the £7 million wrap around the Olympic Stadium in east London following protests in India.
Sky News reports that the move has been welcomed by the Indian Olympic Association, which had threatened to pull out of the 2012 Games over the issue.
However, according to Sky News: “campaigners in India say Dow, which took over the firm behind the Bhopal disaster, has not gone far enough.
“They say Dow should never have been allowed to sponsor the wrap as it will damage the London Olympics' green image.”
Dow, which is one of 11 worldwide Olympic partners, says it has agreed to for its logo to be taken off the wrap in the run-up to next summer's Games following talks with the organisers.
"The agreement between Dow and London 2012 was limited to branding of five 'test panels' that were to be removed in the months before the Games and were not part of the final design," said a spokesman for Dow.
But groups including the Bhopal Medical Appeal say Dow should go further and withdraw its sponsorship altogether.
"This is the first real chink we have seen in Dow Chemical's armour," said a Bhopal Medical Appeal spokesman.
"It's a clear admission that they have started to understand the harm that a company with their appalling track record, including the unresolved situation in Bhopal, will do to the image of the sustainable London Games."
A spokesman for London 2012 said Dow was appointed as a Games partner by the International Olympic Committee in July 2010 and was chosen to sponsor the wrap earlier this year "following a full procurement process".