The Government is to cut its flagship widening participation budget by more than a fifth over the next two years, raising doubts about its commitment to improving access to universities.
Aimhigher, a nationwide initiative to encourage students from deprived backgrounds to apply to university, will have its funds cut by nearly 23 per cent, from more than £97 million this year to £75 million in 2007-08.
Universities, colleges and schools in London will suffer most.
In 2007-08 the central, northern and western parts of the capital will be stripped of a quarter of the money that they receive at present.
The Higher Education Funding Council for England, which helps to fund the project, said the cuts were the result of reductions in the amounts contributed by Aimhigher's two other funders - the Learning and Skills Council and the Department for Education and Skills.
John Rushforth, director of widening participation at Hefce, said: "The LSC has announced that it can no longer afford to fund Aimhigher. The Department for Education and Skills has found some money but can't manage to maintain the amount it gives now.
"Of course I wish the Aimhigher budget hadn't been cut, and there is the risk that universities and colleges will have to have another look at their commitments and needs in the light of this."
Michael Driscoll, vice-chancellor of Middlesex University and chairman of Campaigning for Mainstream Universities, an umbrella organisation representing post-1992 universities, said that the cuts contradicted education ministers' comments about their commitment to widen participation.
Professor Driscoll said: "I think what matters perhaps is the signal that this budget cut will send.
"The message that might be drawn is that the commitment to widening participation is lessening in some way, but that doesn't go with other signals that are being sent out by Ruth Kelly, the Education Secretary, and Bill Rammell, the Higher Education Minister."
Rob Wye, director of strategy and communications at the LSC, said that the growth in the number of students meant that education money had to be spread more thinly.
He said: "The sector has faced considerable funding pressures owing to the increasing number of young people in learning and the focus on a number of key government priorities.
"This has meant that the LSC and the sector as a whole have had to make some tough decisions about funding, which, regrettably, have impacted on areas of funding that are not focused on these priorities," he added.