The agency raised eyebrows in April when it snatched a brief to promote the emirate to the international financial community from agencies with more experience in the region, such as Bell Pottinger and M: Communications.
But now Dubai's Department of Finance has ended its relationship with Finsbury after less than four months, turning instead to arch rival Brunswick.
Finsbury was initially brought in by Nasser al-Shaikh, the then head of Dubai's Department of Finance. He was replaced as its director general in May by Abdulrahman al Saleh in circumstances that remain unexplained.
One agency MD said the loss would be a 'huge blow' as he felt Finsbury was using the high-profile account as a key bridgehead to developing its work in the Gulf. He said: 'It is more than just losing an account; it was a big strategic piece of business for Finsbury.'
Market participants were, however, keen to stress the difficulty of the role Finsbury had taken on - pointing to a lack of coherent reporting lines and a lack of direction from the client. 'Dubai doesn't know what it wants. It wants nice press, but has no idea how to get there,' one Middle East PR professional said.
A Finsbury source said the agency would continue to work with Brand Dubai to promote the emirate to international media and the world's business pages. The source also stressed Finsbury had picked up other clients since the Dubai win and had no intention of 'packing up and going home'.
Finsbury had brought back Simon Moyse from Russian investment bank Renaissance Group, where he was MD global communications, to lead its Dubai operations. He was supported by one other Middle-East based staffer, with a second about to join.
Meanwhile, Brunswick Gulf's brief will centre on Dubai's newly established US$10bn Support Fund for the region's business sector, following the emirate's bumper bond issue earlier this year.
In a statement, Abdulrahman al Saleh said: 'The appointment of Brunswick reflects a significant change in our requirement and relates to the specific task of the establishment of the Support Fund. I am confident this will help us communicate the next phase of the bond programme and achieve the highest levels of transparency.'
How I see it
John Hobday, MD of FD Gulf
From a PR perspective, there is more that could be said about the positives of Dubai. There have been articles perceived as being negative, but there have been many negative articles about Britain, the US and Iceland. Generally speaking, Dubai does an awful lot right - hotels and flights remain well booked and leading banks and corporates still have their regional centres here.
Dubai is the market in the Middle East most likely to boom again once global economic conditions settle down. The PR should focus on those positives and not get drawn into combating individual articles.