The Arts Council has cited an "Orchestral Strategy" which does not formally exist as justification for withdrawing its funding to a West Midlands chamber orchestra.

Orchestra of the Swan (OOTS), which is based Stratford-upon-Avon-based and faces losing its £30,000 annual grant, is one of 194 organisations which could have their funding reduced or removed altogether at the end of this month in one of the most draconian rounds of cuts in the Arts Council's history.

Birmingham Opera Company, which presented its co-production of La Traviata to an audience of nearly 10,000 people - 68 per cent of them first-time operagoers - at the NIA in October, is also threatened with having its grant withdrawn, as is the Birmingham-based literary magazine Raw Edge.

The organisations are appealing against the decision.

An undated letter from Sally Luton, regional executive director of Arts Council England West Midlands, to OOTS artistic director David Curtis, received in mid-December, stated that it had been decided to withdraw the grant because the orchestra would "require a considerable uplift in funding in order to achieve a significant regional impact and profile".

It goes on to say: "The Orchestra is not a priority for an uplift in the context of the national Orchestral Strategy".

However, when The Birmingham Post asked the Arts Council how it could obtain a copy of the strategy, a spokeswoman replied in a written statement: "The orchestral strategy is not a formal written document but a set of national strategic approaches to support the development of the orchestral sector, led by the Arts Council's Director of Music Strategy.

"The main focus of this work has been the development of a national promoter network (Chamber Orchestras Live) for the distribution of chamber orchestral work."

This organisation, which is in fact called Orchestras Live, could not be contacted for comment yesterday. However, it is understood that along with the Association of British Orchestras, the body which represents the professional orchestra sector, it was not consulted about the cuts.

Two other chamber orchestras, the London Mozart Players and the City of London Sinfonia, are also threatened with losing their funding.

ABO director Mark Pemberton, who has written to the Arts Council to express his concern, told the Post: "Where I particularly have concerns for OOTS is that as an up-and-coming orchestra it is the sort of organisation that should really be encouraged.

"It is hard to understand the logic behind the approach that has been taken. It seems perverse to take the view that you need more money and therefore we're going to take your funding away. They are basically being punished for being too small."

The threat to OOTS, which was founded in 1995, has surprised many observers because it has enjoyed a rapid rise in profile in recent years and is regarded as musically outstanding, regularly receiving enthusiastic reviews in The Birmingham Post.

Last year it was appointed as one of the resident ensembles at Birmingham's reopened Town Hall.

Paul Keane, director of programming for the Town Hall and Symphony Hall, said the first three concerts of the residency had been a great success.

"The freshness and the sheer standard of playing in that wonderful new acoustic is just fantastic and is winning new audiences," he said. "The quality of their work is not in doubt and the Arts Council were always very encouraging about the orchestra's work and supportive of our relationship with them."

The Arts Council cites doubts about the orchestra's sustainability, its failure to appoint a general manager and raise more sponsorship as reasons for withdrawing its support. All of the points are contested by the orchestra in its response.

The Arts Council also pointed to dwindling audiences in a residency at Bedworth, something which Mr Curtis says is due to special circumstances relating to the venue. The orchestra has a strong commitment to new music, with a list of more than 30 commissions, and the award-winning Errollyn Wallen is its composer-in-association.

It also carries out community work, with a residency in Shard End in Birmingham and a four-year educational programme about to begin at the Welcombe Hills Special School in Stratford, where its office will be based from the end of January.

Mr Curtis said it was difficult to predict exactly what the effect of losing its Arts Council funding would be.

"We have a contingency in place for the first year, and we will be making savings somehow or other," he said.