BARNSLEY Council is set to pull more than 20 per cent of its funding to Barnsley Premier Leisure.
Tim Wilson, chief executive of BPL, warned the reduction will have a 'substantial impact' on the services it can offer.
The council has decided to reduce the amount paid to Barnsley Premier Leisure by £100,000 from April and by a further £100,000 next year.
A council paper shows it paid the not-for-profit organisation £1,031,932 for 2012/13 to operate leisure centres such as the Metrodome and others in borough.
Mr Wilson said: "BPL has invested heavily over the past two years on its facilities to increase income streams, but a cut of this magnitude will have substantial impact on the services we can offer."