The Treasury has declined to comment on claims it intends to slash £320m a year from the Big Lottery Fund’s budget in the comprehensive spending review.
Charity groups have warned the claims, made in a blog post by a group calling itself Save Big Lottery, and publicised on Twitter, would have drastic consequences if true.
The blog post alleges the group has been told by "reliable sources" that the government is planning to redirect £320m of the proceeds which the BLF receives from the National Lottery and transfer it to fund the arts, heritage and sport — to make up for budget cuts at the Department for Culture, Media and Sport.
The move, the blog said, "will devastate charities, community groups and voluntary organisations across the UK".
It is not clear who is behind the blog.
The BLF received £670m of good cause funding from the lottery last year — meaning that if the claims are true, a cut of £320m would represent a 48 per cent cut.
A Treasury spokesman told Third Sector: "Like with all fiscal events we wouldn’t comment on speculation."
The BLF also declined to comment on the claims.
Ciaran Price, policy officer at the training and publishing charity the Directory of Social Change, said: "If this is true, it is outrageous.
"Lottery money is not there make up for budget cuts, it’s there to support communities and is a vital life-line for our beneficiaries. Charities are already struggling to meet increasing demands on their services and face huge financial uncertainty for the future."
The last Labour government borrowed £675m from the Big Lottery Fund to pay for the Olympics, with the debt not expected to be paid back until 2031.
Price said: "Unfortunately governments have developed a habit of interfering with the Big Lottery Fund having already stolen millions from it to fund the Olympics and failing to honour its commitment to repay.
"If true this only strengthens the argument that BLF needs to be independent of government, and would raise further questions as to whether or not this government is pro-charity."
Neil Cleeveley, chief executive of the local infrastructure body Navca, said: "This seems unbelievable but then again the scale of the government’s planned public spending cuts would have been unimaginable not so long ago."
He pointed out the BLF’s share of lottery funding had been 50 per cent before it was reduced to 40 per cent in 2010.
"I hope there is no truth in this disgraceful idea – austerity has already done enough damage to far too many communities," he said.
"If there is any truth in this, we will fight it all the way."
A spokesman for the charity chief executives body Acevo said: "Acevo will be watching the spending review very closely.
"No one is expecting it to be painless but the movement of money away from services or that that inform them will further exacerbate a very difficult environment. The movement of money in sums of scores of millions would represent the exponential escalation of difficulty."
The National Council for Voluntary Organisations declined to comment on the claims.