The organisation said last week that its additional contribution was equivalent to four years' spending on community and voluntary sector grants and its work with young people.
"Our grant-making for the foreseeable future will be seriously reduced," said the fund's chair, Dame Liz Forgan.
The fund has promised to honour existing awards while considering how to deal with future grant-giving. "We don't know at the moment how the cake is going to be divided up," a spokeswoman said.
John Sell, chair of Heritage Link, a support organisation for UK heritage charities, said: "The Government rightly applauds the value of heritage in one breath, but in the next undermines our ability to maintain that value by cutting essential support."