The changes have stripped FareShare of a vital grants stream. In recent years the charity got about £40,000 of its £3m annual income from the landfill tax credit. But when Defra reviewed the landfill tax credit scheme last year, this funding dried up.
FareShare objected to the changes and hoped the £284m Business Resource Efficiency and Waste programme (Brew), announced by Defra in November, might offer some restitution.
But FareShare marketing director Alex Green said grants for diverting waste from landfill had been removed. "In effect Defra says feeding homeless people is not cost-effective, so it won't," he said.
FareShare is preparing to give a policy briefing on the subject in the House of Commons next month.
FareShare chief executive Tony Lowe said: "Despite diverting thousands of tonnes of food from landfill for 10 years, FareShare has been deprived of essential funding for work that is both environmentally useful and socially inclusive.
"We will have to seek alternative funding or seriously curtail our operations."
The landfill tax credit review came just as FareShare began to place more emphasis on the environmental benefits of its work. One of the main reasons it set about extracting itself from Crisis last year was to obtain more environmental grants.
"Because Crisis does not have an environmental agenda, it was hard for us to get money on the basis that we were minimising waste," said Green.
The UK food chain produces around 17 million tonnes of waste each year, about a quarter of which is fit to be eaten when dumped.
"We have tried to have discussions with Defra to find out how it will make inroads into this growing environmental and social problem, but found both the Food Directorate and the Waste Directorate unwilling to meet us," said Lowe.
Defra information officer Suzanne Baker said: "Funding for projects targeting social deprivation is not in the remit of Defra. This falls to other government departments and local authorities."
She said the Government supported diverting food waste away from landfill but needed a "more strategic approach" to sustainable waste management if it was to meet EU landfill reduction targets. The new Brew programme will help businesses to cut their waste.
She added that in November Defra had announced a £4m package to support the voluntary sector's "vital work in re-using, recycling and composting waste".