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Prime minister's flagship idea at risk as reduced funding for community-based activity threatens to undermine local power

Thousands of small community-based charities expected to help deliver David Cameron's "big society" idea are facing potentially devastating cuts, leaving some under threat of closure, and putting services to some of Britain's poorest and most vulnerable people at risk.

Charities have warned that many local organizations that reflect the ideas promoted by Cameron - some of them were conducted to ministers as a model "big society" projects - is in danger of collapse, as councils aim to reduce by 30% within 3 years .

Voluntary organisations affected include those providing local services such as after-school clubs, play schemes, domestic violence charities, rape crisis centres, parenting programmes, projects to tackle youth crime, and support schemes for isolated older people. The cuts range from million-pound investments to grants worth just hundreds.

Sir Stuart Etherington, CEO of the National Council of Voluntary Agencies, said: "Small scale community activities is essential to civil society. It depends on small grants and, if they destroyed it removed a support structure that depends on community groups and undermine the great society. "

Stephen Bubb, CEO of the Association of Chief Executives of Voluntary Organisations, said the cuts meant the government would struggle to "close the gap between its heady rhetoric and current reality". Charities were likely to bear the brunt of reduced spending. He added: "It's just like the 1980s. Charities are seen as the easy target."

Charities are furious that some councils and central government departments appear to be riding roughshod over the so-called compact arrangement - a voluntary agreement that requires statutory funders to consult charities over proposed funding changes. Many charities rely on the compact as they do not sign formal legally binding contracts with councils.

One local charity leader said: "What the government says it wants to achieve with the big society and how it is behaving are two different things. All this has created a lack of trust. Within weeks of this government starting out it has destroyed its relationship with the sector through its dishonesty."

Community projects and small charities affected include a charity in Ealing, west London, that attracted ministerial praise after recruiting 1,600 new volunteers, each pledging 100 hours' service. It says its programme will close after it lost £1.3m of Whitehall funding agreed by the previous administration. The government's "big society" adviser Lord Wei recently visited the scheme in Ealing, west London, and declared it to be at "the cutting edge of a lot of what … community organising ... is looking to be about." Ealing council's voluntary service chief executive, Andy Roper, said: "Government said that this year's cuts were about cutting waste; but our experience is that they will impact on the voluntary sector frontline."

A rape crisis centre - one of just two in London - faces a £30,000 funding cuts - equivalent to a tenth of its budget - after Conservative-led Croydon council in south London announced a 66% reduction in its grants pot for local charities. Rape Crisis South London fears losing a further £106,000. London Councils, is to consider whether to give a £16m charity grants pot back to individual councils, with no guarantees that the money be spent on charities. Croydon's council leader Mike Fisher last month voted himself a £13,000 rise in his allowance, taking it to £65,000.

Also at risk is a community-led project aiming to create 67 jobs in neighbourhood social enterprises set up by residents on one of Britain's most deprived estates. Ministers have suspended a New Deal for Communities grant, which Glenn Jenkins of Marsh Farm Outreach, based on the Marsh Farm estate near Luton, said would be a "complete disaster" and would "fly in the face of the claims by the coalition to cut without affecting the poorest".

Ministers also adopted the zenith of local charitable umbrella groups that help create and develop small grassroots organizations. Many said, without consultation, that they no longer receive millions in compensation under the agreements signed by the previous government.

Some of the groups, known as councils for voluntary service (CVS), have been left tens of thousands of pounds out of pocket after investing financial reserves in projects with the expectation that funding would continue. They are anticipating even deeper cuts next March, when further spending reductions agreed in this autumn's spending review are expected to filter through to council budgets.

Cameron said in his speech the "big society" was an attempt to empower local individuals and groups: "We need to create communities with oomph â€" neighbourhoods who are in charge of their own destiny, who feel if they club together and get involved they can shape the world around them."

Interviewed afterwards, he denied the scheme was a cover for cuts to public services. He said: "It is not a cover for anything. I was talking about the 'big society' and encouraging volunteering, encouraging social enterprises and voluntary groups to do more to make our society stronger. I was talking about that way before we had a problem with cuts and deficits and all the rest of it."

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