The Big Lottery Fund looks set to surrender further cash to cover the growing cost of the London Olympics.
A Department for Culture, Media and Sport spokesman said that a new budget was being agreed in discussions with the Treasury and would be concluded within the next six weeks. According to newspaper reports, however, ministers have already agreed to make a second raid on the BLF, which is already set to lose £1.5bn to the Games.
London mayor Ken Livingstone has endorsed calls from groups such as the NCVO for the Treasury to forgo its 12 per cent tax on lottery prizes in order to raise extra cash for the games.
Stephen Bubb, chief executive of Acevo, claimed voluntary organisations were already suffering as a result of dwindling BLF resources.
In a letter to sports minister Richard Caborn, Bubb raised concerns that only 20 per cent of organisations applying to the fund's Reaching Communities grants programme were successful.
A BLF spokeswoman said its funding programmes were proving to be extremely popular and demand for funding far exceeded the amount of money available.