Olympics put £20m grants at risk

The Alliance, which represents local authorities throughout th UK, said Gwent organisations would be hit after the government agreed to divert an extra £675 million from the National Lottery's good causes pot to the 2012 event.

The group warned that the victims would be grassroots voluntary groups and projects, for whom the Lottery had offered a "lifeline".

A total of £2.17bn of Lottery cash will now be spent on the Olympics - equivalent to £35 for every person in the country.

Assembly culture minister Rhodri Glyn Thomas estimates the cost to Wales will be about £70m between 2009 and 2012, and the impact will be felt for years to come.

Mr Thomas attacked the decision to divert money away from Wales in a letter to the then culture secretary John Purnell last month.

Earlier this week, the Arts Council for Wales (ACW) revealed it may lose £8m from its budget because of the 2012 games.

Assembly first minister Rhodri Morgan admitted it was impossible for the Assembly to make the Government to provide compensation, possibly with the sale of land after the Olympics, after Newport West Am Rosemary Butler voiced concerns.

The Alliance said: "These losses will directly impact on good causes throughout the UK, with some areas of greatest need suffering the worst."

Newport Borough Brass Band are one group who have had their bid for funding to help pay for £60,000 of instruments put on hold because of London 2012.

Secretary John Bray said: "It is disappointing."

Newport West AM Rosemary Butler described the funding deficit as a "serious loss".

"It isn't just directly funded organisations like the Borough Band who are affected.

"Bodies such as local authorities who depend on the Lottery to build up their overall funding programmes will be hit.

"Sports clubs, dance groups and the local Citizens Advice Bureau could all suffer," she said.