Yorkshire Forward, the Government-controlled quango, was one of England's nine regional development agencies (RDAs) to express dismay last night after an announcement that their budgets were to be slashed by a combined £50m.
Trade and Industry Secretary Alistair Darling announced the funding cut for the next financial year although full details of the implications for the individual agencies are yet to be finalised.
Leaders of the nine agencies said they would face "hard choices".
Yorkshire Forward chief executive Tom Riordan, whose agency called the cash re-allocation a "budget raid", insisted last night that the £6.5m cut would not get in the way of his organisation "delivering in the region".
"This announcement comes as a disappointment but I am determined that this development will not affect the quality of our work," he said.
"Our focus now must be on working with our partners and stakeholders to asses how we can absorb these reductions and I will continue discussions with central Government to ensure minimal disruption to our activities as we implement these measures.
"The Yorkshire Forward Board will be deciding its priorities for the next year, under this budget, during March and April."
Mr Riordan added: "Yorkshire Forward is already one of the leanest RDAs in the country, with 94p in every pound we spend going directly into regenerating the region, and has a proven track record in delivering value for money initiatives.
"In 2005-6 we met or exceeded all our Government targets, for example attracting £582m investment to the region."
A Department of Trade and Industry (DTI) spokesman called the cuts "general housekeeping".
He said: "It's due to pressures on other budgets in the DTI, which is being spread right round the regional development agencies.
"It's important to remember that next year's budget will still be bigger than this year's and that the £50m is in the context of £2.32bn for all the RDAs."