Ministers have been accused of quietly dropping a grant worth £20 million to Yorkshire councils that helps them support people in crisis.
The money is used by councils to provide emergency food, heating and white goods to families struggling to make ends meet.
In the past year, some Yorkshire authorities have also chosen to support the work of the growing network of food banks with the cash.
But councils picking through the details of their financial settlement from the Government, announced last week, say the money, known as the ‘Local Welfare Provision Grant’ will disappear from their budgets in 2015.
The Government last night insisted money for this kind of work would now be included in the main grant given to councils but local authorities say they have seen no evidence.
Barnsley Council leader Sir Steve Houghton, chairman of the SIGOMA group which represents urban councils, said: “The announcement, hidden in Wednesday’s local government financial settlement, is another blow to people who are already exposed to the impact of welfare changes and are becoming ever more reliant on council services.
“This latest cut will take funding away from people who need it in times of crisis and is a further pressure on councils in deprived areas trying to provide for their most vulnerable residents.
“Not only are the Government cutting councils funding which allows us to provide for our most vulnerable people but they are not even warning councils about it.
“With effects of welfare reform and huge council funding cuts already planned for 2015, councils are getting ever closer to breaking point.”
The row over the Local Welfare Provision Grant is the latest in an increasingly bitter dispute between councils and the Government over the way they are funded.
The Government claims councils are facing a cut of just 2.9 per cent in their funding for next year but councils insist the true figure is much higher with authorities such as Leeds saying it faces a cut of 10 per cent next year and 15 per cent in 2015.
Among Yorkshire council, Leeds received the biggest sum from the Local Welfare Provision Grant, at £3.4m, Sheffield was given £2.4m and Bradford received £2.3m.
A spokesman for the Department of Communities and Local Government said: “This Government is devolving more power and discretion to local councils, so they can best target those most in need.
“From 2015, the Local Welfare Provision Grant is being wrapped up in general central government grant to local authorities, as part of our broader commitment to reducing ring-fencing.”
The row over funding is heating up as a growing number of local authorities consider abandoning their freeze on council tax bills next year.
The Government has offered councils a series of cash incentives to hold bills at their 2010 levels but council leaders are increasingly arguing that financial pressures mean bills have to rise.
This year, Bradford, Calderdale, Wakefield, Kirklees, Hull, Richmondshire and York put up their council taxes with the majority expected to do so again in 2014.
Leeds has already indicated it will raise bills next year along with Conservative-run North Yorkshire Council.