A brand attack campaign by the environmental organisation, which began this summer, attracted one million signatures to a petition calling on Lego to stop promoting Shell’s brand because of the oil firm’s plans to drill in the Arctic.
The Lego/Shell partnership has already seen 16 million Shell-branded toys sold in petrol stations around the world.
Greenpeace was furious at what it believes was Shell’s attempt to use the partnership to cloak its activities in the positive image of a brand synonymous with children and play.
Greenpeace then attempted to deliver a petition, then totalling just 115,000 signatures, to Lego HQ in Slough accompanied by campaigners and children dressed as Lego people.
Lego’s response was to lock its doors and issue a statement that the issue was between Greenpeace and Shell.
Last month, PRWeek was invited to attend a creative ideas session at Greenpeace HQ in which ideas to escalate its campaign against Lego were discussed.
In a shock climbdown, Lego issued a statement on Thursday morning to say it would not renew its partnership with Shell once the current contract ended.
Jørgen Vig Knudstorp, chief executive of Lego Group, said: "We want to clarify that as things currently stand we will not renew the co-promotion contract with Shell when the present contract ends."
In a blunt addendum to the statement, Knudstorp said: "We do not want to be part of Greenpeace’s campaign and we will not comment any further on the campaign."
The existing contract between Shell and Lego will end in 2016, Shell confirmed.
Lego defended its partnership with Shell saying it had delivered on its objective to put its toys "into the hands of many children".
There were clear indications in the statement that the Greenpeace attack campaign had placed irresistible pressure on the company.
Knudstorp said: "We do not agree with the tactics used by Greenpeace that may have created misunderstandings among our stakeholders about the way we operate; and we want to ensure that our attention is not diverted from our commitment to delivering creative and inspiring play experiences."
Greenpeace said its victory should give other brands pause for thought before partnering with companies that contribute to climate change or environmental damage.
Elena Polisano, Arctic campaigner at Greenpeace, told PRWeek: "This is a major blow for Shell. Shell desperately needs to rebuild its reputation since its previous disastrous attempt to drill in icy Arctic waters, so it really counts on well-loved partners like Lego to give it a softer profile. Shell’s PR team will be reeling from Lego’s move, but it couldn’t have come soon enough for the Arctic. It’s six weeks since Shell revealed it’s planning its risky Arctic comeback, and to get there it needs all the good publicity it can get. Lego’s move is a clear indication that the tide is turning for outdated climate-wrecking dinosaurs like Shell who want to exploit the melting Arctic for more of the oil that’s already melting our world."
A Shell spokesperson said: "Our latest co-promotion with LEGO has been a great success and will continue to be as we roll it out in more countries across the world. We don’t comment on contractual matters."