SCOTS CHARITIES are facing "death by a thousand cuts", according to voluntary sector leaders reeling from raids on vital lottery cash.

Community groups are dismayed by MPs' approval of the transfer of £184 million of lotto funding for good causes in Scotland toward the spiralling cost of the London Olympics.

The diversion so far of more than £2 billion of National Lottery money to the 2012 games means many community groups for the disadvantaged, as well as arts, sports and heritage organisations, are already feeling the squeeze.

Martin Sime, director of the Scottish Council for Voluntary Organisations, said: "The National Lottery is already turning down lots of good proposals because it hasn't got the money, and it's going to turn down more. There will be loss of jobs and service. At precisely the time when more work is needed to combat social problems, there aren't the sources available to make that happen. It's not justified and it's wrong in principle."

"We're not anti-Olympics; if they want to have the games in London, then fine. But why should Scottish charities have to pay for that?"

Helen Macneil, chief executive at the Glasgow Council for the Voluntary Sector (GCVS), said many jobs and community projects are under threat. "It's all very unsettling. We know of organisations where staff are leaving or are on redundancy. It's a nightmare trying to plan ahead when you don't know if funding streams for chunks of work are going to be there in three months' time.

"It's death by a thousand cuts. The cards are stacked against us at the moment and a lot of small to medium-size groups are in serious danger."

A GCVS poll found more than 75% of charitable groups in the city had deep concerns for their viability due to funding worries. The Edinburgh Voluntary Organisations Council is equally concerned about cuts in the capital, where black holes in the city council budget have compounded the difficulties.

Many are predicting tough times ahead for smaller charities as the sector also sees European funding cut as cash moves to the new eastern European EU states, and the restructuring of local authority resources following the Scottish government's freeze on council tax.

"The cuts to lottery funding are part of a wider problem, with different sources of funding drying up or changing at the same time," said Macneil.

Ian Brooke of South Edinburgh Voluntary Sector Support Project added: "In the last year, there have been organisations I expected to get grants which didn't get any. It's been surprising. We'll have to wait to find out who suffers, but it may be grassroots groups that are the most disproportionately affected."

Some charities are finding it difficult to get funds to develop sporting facilities, a bitter irony considering the major sporting events heading to the UK.

Possil Renewal general manager John Duncanson, who helped set up the Millennium Leisure Centre in the deprived Glasgow community, said: "Money seems to be getting squeezed because warchests are being built up for the Commonwealth Games and the Olympics. We've shown you can change lifestyles and opportunities, but we can't get support for love nor money."

Allan Teesdale, who runs the Ashdown Grove Community Association for pensioners in south Edinburgh, added: "It's communities like ours that put money into the lottery; we buy the tickets. We've done very well so far with grants, but it's sad that less money will be available. Quite a few pensioners will suffer."

Sime warned that Glasgow should learn from the damage done by diverting funding to the Olympics. "If they follow the same mechanisms for organising the Commonwealth Games, we'll lose out twice," he said.

SNP Westminster spokesman on culture, media and sport, Pete Wishart MP, criticised the 36 Scottish MPs who voted to approve further payments to the Olympic Lottery Distribution fund.

He said: "This raid on lottery funds will hit every community across the country, and it was simply despicable for Scottish MPs to short change their own constituents like this."