Immediate responses were fired from the Heritage Lottery Fund (HLF), the Big Lottery Fund, the Arts Council England (ACE), and Sport England after Tessa Jowell, the secretary of state for culture, media and sport, announced last month that £675m would have to come from the lottery coffers to help the Olympics.

The budget for the 2012 Olympics in London has trebled over the past year causing the National Lottery to take a whopping hit. That money would have been earmarked for the lottery distributors between 2009 and 2012. Last year, the lottery distributors lost £410m to the Olympics.

The HLF's individual contribution to fund the Olympics is £90.2m. Liz Forgan, chairwoman of the fund, said: 'This is bad news for the UK's heritage. Our ability to award grants for the foreseeable future will now be seriously reduced, affecting people right across the UK.'

She added: 'This further cut will impact on our ability to invest in the nation's heritage at exactly the time it is being showcased to the world in 2012.'

The HLF equated the £90.2m to four years of grants to smaller community and voluntary sector projects, plus its young people's strand of funding.

And a spokeswoman said that although the HLF would still fund large capital projects, competition would be increased. The HLF assured those museums and heritage organisations that had received a 'promise' of funding that they would be unaffected.

The Mary Rose Trust in Portsmouth is planning to submit an application to the HLF in June for its new museum building and ship conservation project. After a failed HLF bid for £13m last year, the HLF recommended the trust apply again.

John Lippiett, the chief executive of the Mary Rose Trust, said: 'We fight and fight for survival. The HLF is a major life source.' Having been awarded nearly £6m over the years from the HLF, he said 'without that the Mary Rose wouldn't be in existence today. The future becomes far less certain than before'.

And he added that raiding the fund during the years leading up to the Olympics is 'mis-timed and ill-judged. 'This sends out all the wrong messages,' he said.

Similar sentiments were heard from others in the sector including David Barrie, the director of the Art Fund. He said: 'Such a short-sighted raid is likely to undermine a decent cultural legacy from the Olympics, and makes the prime minister's celebration of a golden age for the arts ring very hollow.'

Contributions from the other distributors to the Olympics are: the Big Lottery Fund, £425m; ACE, £62.9m and Sport England, £55.9m. As a result of the announcement, many are starting to look to the Treasury for a decent outcome for culture in the next Comprehensive Spending Review (CSR).

Peter Hewitt, the chief executive of ACE, who recently made redundancies because of previous cuts to funding, said: 'We must hope that the government will compensate the arts for this setback through the spending review and we will be seeking an urgent meeting with the Treasury to discuss the situation.'

Mark Taylor, the director of the Museums Association, said: 'It's pretty outrageous. I don't think the Treasury has the right to take lottery money. It's not theirs to take.' He added: 'I think the reaction from the lottery bodies has been muted. There is fear that they will upset the balance in light of the CSR.'

Felicity Heywood