The directors who have resigned include Satyan Anthikad, Sreenivasan, Priyadarshan, Ranjit, Lal Jose, Rafi Mecartin, Siddiq, Joshi and Fasil, MACTA sources said.
The Federation is a confederation of 19 unions, including musician and cinematography unions.
Well-known playback singer K S Chitra, a member of the musicians union and M S Kumar and P Sukumar of the Cinematographers unions have also put in their papers, they said.
Actor and Director Sreenivasan said efforts are on to build a new organisation of creative people.
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The issue cropped up when popular Malayalam actor Dileep, who was to act in a film being directed by Thulasidas, refused to do the movie after taking an advance allegedly because the director's last film was a big flop.
To sort out the issue, the MACTA federation held a meeting here on Wednesday last and it was decided not to cooperate with the actor and to boycott him.
However, Director Siddiq, who took Dileep in one of his movies, protested against the move as a result of which differences cropped up between him and MACTA General Secretary Vinayan.
Siddiq resigned along with Lal Jose and Ranjit followed by a spate of resignations from other directors.
There are 258 members in the directors union. Meanwhile, Vinayan has called for an emergency meeting of the MACTA Federation tomorrow to discuss the developments.