Centre users at John Storer House, in Loughborough, which has had its funding cut
Charnwood Borough Council has reduced the 2009 grant to John Storer House, in Loughborough from the £53,000 agreed earlier this year to £44,000.
Other centres and community groups in the borough could face cuts next year because the council will be reviewing how it hands out cash under the Charnwood Grants scheme to ensure "value for money".
There was £360,000 in the pot for organisations in this year, but the council says there is less money to go around as more and more groups need funding because of the economic downturn.
The cut to John Storer House's grant was agreed at a cabinet meeting on Thursday, where councillors were told there was "uncertainty" about how much money would be available for grants in future years.
Bosses at the centre said it could affect many of the services it offers and lead to increased charges for users.
Neil Lambert, chief executive of John Storer House, fears the grant could be cut further next year.
He said: "It's very frustrating – this is money that we were expecting this year and we'd budgeted for.
"We all know public finances are going to be tight, but if we had been given some notice this was going to happen we could have prepared.
"A cut of £9,000 may not sound a huge amount but we're already dipping into our reserves this year."
Loughborough Labour MP Andy Reed said he was shocked at the decision by the Conservative-led council and has written to leaders asking them to reverse it.
Charnwood's Labour opposition councillor Max Hunt believes it may be the first of many organisations to face cuts and he hit out at the council for threatening the "vital" services offered at the centre.
Coun Hunt said: "This is the beginning of an apparent death wish, not just to cut front-line services, but to hit the most vulnerable first."
Figures for last year showed the centre had a total income of about £238,000 – including this grant from the council – and spent most of this, about £235,000, on providing services and running costs.
The centre hosts many weekly activities including card games, keep-fit classes and dances.
It also offers a wheelchair-loan scheme. John Storer House's grant was £55,000 last year.
A council spokeswoman said: "The settlement to the John Storer House Foundation needs to be considered in the context of increasing demand for grants in difficult economic times.
"The grant approved at the cabinet meeting of £44,000 is below that allocated to John Storer House last year but is comparable to the amount allocated in previous years."