Communitybuilders and the Social Enterprise Investment Fund, the grant and loan funds for developing social enterprise, will not pay out any more money until further notice while a government review is carried out.
The funds, set up by the Labour government to provide investment for community cohesion and to develop new social enterprises in the field of health, are worth about £170m between them. Both are administered by Social Investment Business, which also ran Futurebuilders England, the government-backed loan fund recently closed down by the new coalition government.
A spokeswoman for Social Investment Business said both funds had been suspended pending a review, but neither was closed and applications were still welcome.
She said: "In common with other government spending, the Communitybuilders programme is being reviewed to ensure it meets the new government's objectives and priorities for the big society agenda. A similar situation applies for the Social Enterprise Investment Fund."