additional permissions are required to access the following files

I believe that I have resolved this error message when using Office (version 2016) on Mac with OneDrive.

I have a perpetual license, and am also logged in via OneDrive through my institution (also allowing an Office 365 license). I thought that this clash of credentials might be the issue.

The error only occurs when opening Office files from a OneDrive location.

Under OneDrive, More/Preferences, the Office tab has an option to 'use Office applications to sync Office files that I open'.

Deselecting this option, results in no longer seeing the error message when trying to open the file within Office.