More than £4m of funding to voluntary sector organisations that tackle extremism and racism could be under threat when the Commission for Racial Equality merges with other equality bodies to form the Commission for Equality and Human Rights.
About 130 voluntary organisations received grants of up to £100,000 from the CRE's Getting Results funding programme last week. But the organisation does not know whether the programme will continue once it becomes part of the CEHR in 2009.
A CRE spokeswoman said: "The issue is that government pronouncements so far, and the Equality Act in particular, do not guarantee funding that the CRE has dispensed."
Last week's awards were the largest ever made through Getting Results and 20 per cent higher than last year's. The money will be spent helping small organisations become more effective at delivering local race equality work and on one-off projects to ensure greater interaction between different communities.
"Recent events have put our local partners on the front line, reconciling fractured communities," said Trevor Phillips, chair of the CRE. "We want to ensure the invaluable work we have invested in over the past 30 years continues."
Krishna Sarda, chief executive of the Council of Ethnic Minority Voluntary Sector Organisations, said he was concerned about funding and the lack of leadership created by the merger. The Disability Rights Commission and the Equal Opportunities Commission will merge to form the CEHR in 2007, to be joined by the CRE in 2009.
A Department of Trade and Industry spokeswoman said the anticipated budget of the new organisation would be 43 per cent higher than the combined resources of the existing commissions.