Public sector dance and drama schools are complaining that they have been excluded from a multi-million pound student support scheme launched by the Arts Council.
The scheme will help cover tuition fees for students unable to get discretionary awards from local authorities for private dance and drama schools.
National Lottery funding is to be combined with money from the Department for Education and Employment and local authorities to raise an estimated Pounds 30 million to cover most of the fees.
But publicly-funded colleges say the scheme should be extended to also cover students looking for a place on a diploma-level course at a state sector institution.
Restricting extra support to those attending private schools is inequitable and puts public institutions at a disadvantage in the competition for students, they argue.
Nadine Senior, principal of the Northern School of Contemporary Dance, one of the smallest higher education institutions in England, said state institutions were already at a financial disadvantage because their fees were set at up to Pounds 7,000 lower than private schools.
"We are trying to run similar courses to those in the private institutions, but on a much lower level of funding. This will put us at a further disadvantage because our students will not qualify for the extra support," she said.
Maggie Semple, head of education at the Arts Council, said there was a greater need for support for students at private schools because very few qualified for awards and fees were higher.
"We could not afford to extend it across the sector. We had to draw the line somewhere," she said.
Lord Gowrie, Arts Council chairman, said the scheme was an interim measure designed to help students until a more permanent system for supporting training could be set up.
It will run for four years, covering two and three-year courses, and two-year stage management programmes beginning this autumn and next. Colleges will apply to the Arts Council for funding on behalf of students on accredited courses and awarded some funding by local authorities.