"I eventually came to this decision that very young children - under a year old - could sit on my knee at the parents' request."
The Father Christmas complained that children were only allowed one minute with him, saying: "It's nothing more than a cattle-herding exercise to keep the visits as short as possible so they can get as many people through the door as possible and make a lot of money."
The kids are only getting about a minute in the grotto and if they ask a question which isn't in the script you are supposed to ignore them.
"We're not really meant to converse with the children at all."
In a letter to the Scotsman explaining his decision to resign, Mr Daviot added: "I quickly discovered to my cost that digressions from the bland, formulaic script were being reported to management by the female elves working as Santa's helpers.
"We were, in fact, being spied on."
The actor, who lives in Edinburgh, also complained there were no lavatories for staff and nowhere to store personal belongings.
But organisers of the grotto, part of the city's Christmas festival, said Mr Daviot was a "bad Santa" who was "brusque" with children, interrupted parents and clashed with his elves.
A spokesman for Underbelly said: "Unfortunately, Mr Daviot was a Bad Santa who decided to leave Edinburgh's Christmas of his own accord on 13 December.
"However, if he had continued to flout the guidelines, he would have been dismissed and sent back to Lapland.
"He was given a formal warning on 12 December for contravening company guidelines for allowing children to sit on his knee, before choosing to resign.
"We were very disappointed by this but we were right to act on the experts' advice."
One grotto worker said: "He was a really grumpy Santa. Everyone loves the job, but he seemed to hate it.
"He didn't get on with anyone - even the elves. He was very brusque with the children and their parents and would interrupt children, saying "I'm talking now".
"It's funny that he's complaining about the children not having enough time with him - he couldn't wait to get them out of the grotto."
Mr Daviot insisted he had not been grumpy with the children, saying: "Quite the opposite - and that's what the fuss was about.
"I was actually making an effort to interact with the children rather than just sticking to an
unbelievably bland script.
"I became grumpy with the way the whole thing was being run but I wasn't grumpy with the children."
Parents have complained about the presents their children received, with some saying gifts including a bouncing ball and a paint-by-numbers book did not represent good value for their £5.
- Daily Mail