The charity's three-year, £3m relationship with Nestle expires at the end of 2004.
With Breakthrough Breast Cancer turning down the company's offer of a cause-related marketing partnership, 4Children has to weigh up its position in the face of growing pressure against the Swiss giant.
Nestle has been fiercely criticised for allegedly breaching an international code banning the marketing of baby milk in developing countries.
Anne Longfield, chief executive of 4Children, previously known as Kids' Club Network, denied that the cancer charity's decision reflected badly on those who continued to allow Nestle to boost their fundraising coffers.
"I don't think it shines any bad light on us," she said. "What it does show is how difficult it is for charities to find the funds to do the work they want to carry out.
"I respect Breakthrough's decision, and I'm sure they respect ours too. It's a partnership with a purpose - it enables us to carry out an activity that the Government and others don't provide the funds for. At the moment, our views haven't changed and we are pleased to be working with Nestle."
4Children's link with Nestle dates back to 1996. The latest three-year funding round supports the charity's teenage provision project, 'Make Space'.
Nestle offered money to Breakthrough, plus the chance to promote itself on packets of cereals such as Shredded Wheat.
"We take extremely seriously any decision to turn away funding," said chief executive Delyth Morgan, whose staff and supporters were consulted on the decision. Two years ago, Breakthrough refused a £50,000 deal from wine company Hardy's to use its name on its bottles on ethical grounds.
In a statement, Nestle said it "takes its corporate social responsibilities very seriously".