Lambeth Council has confirmed it plans to cut nearly £90m from its budget over the next five years.
As a result, up to 35 per cent of the funding for voluntary organisations supporting young people will be cut from January. A council spokesman said the authority was holding a consultation and was not yet able to say what the reductions would be for the voluntary sector overall.
The annual budget for children and young people’s services was £80m in 2009/10, but will be reduced to £70m during this financial year.
The local authority will also make some voluntary organisations providing children and young people’s services reapply for contracts during this financial year so the terms can be renegotiated.
Cuts to funding for voluntary sector organisations providing care services for the elderly are also expected.
A Lambeth Council spokesman said: "The council greatly values the tremendous contribution of voluntary sector services to the lives of children and young people and their families and we are committed to keeping any reductions to an absolute minimum.
"As a result of a very challenging financial climate that all local councils face it is vital that we take these very difficult decisions and we are currently consulting all staff within the children and young people’s service on a proposed restructure."