The future of Woodcraft Folk, set up 40 years ago as an alternative to the Scout Association, is in doubt following a government decision to halt its funding.
The charity was set up to give poor children from urban areas the chance to enjoy fresh air and exercise in the countryside, and now has more than 12,000 members. It has only five full-time members of staff, and is dependent on volunteers.
On ending the annual £52,000 grant, the Department for Education and Skills said Woodcraft's claim for funding lacked detail and did not represent "good value for money".
Vice chairman of the group Stewart Hunter said: "It is unacceptable that, at a time when the Government is trying to encourage the participation of young people in the wider world, our grant should be stopped."