Thousands of people face losing vital services because the future of charities and organisations has been thrown into doubt due to a delay in funding.

The delay has hit groups which help some of the community's most vulnerable members of society, including under-privileged children and young people, the elderly, the unemployed, the disabled, women's groups and groups which represent minority organisations.

It is estimated there are more than 900 charity and voluntary groups in the Brighton and Hove area and 131 of them made the annual scramble to meet the March 31 deadline to make a funding application to the city council.

They were bidding for a share of the £1.3 million pot of cash the council said was available this year.

The leaders of the organisations continued to plan their futures and the schemes they would run while waiting to hear if their applications had been successful.

But when the letters arrived on July 13 from the council, they did not offer the grants.

Instead, they were told the decision-making process had been delayed because the Cabinet had failed to reach a decision on the grants.

The letter, signed by Clare Demuth, the council's regeneration manager, said: "You may be aware that the applications received by the grants office totalled over three times the available budget and the decision-making process has been an extremely difficult one.

"The Cabinet met to consider final recommendations but has decided that it needs further time for deliberation."

The letter told them they would now have to wait until September 12 to find out if they had been successful with their applications.

It concluded: "We apologise for this delay and, given the over-subscription to the programme, would encourage all organisations in the meantime to continue to seek alternative sources of funding."

The letter said the organisations, which already had their council funding rolled forward from April 1 to the end of September, would receive a further quarter's funding until the end of December.

For many organisations, even if the money does come through, the delay has thrown a veil of uncertainty over the future of groups which cannot exist without firm promises of cash.

Although they are charities, many of the organisations pay staff wages and, like any other business, need to have finances secured in order to carry out long-term business plans.

Now some of the groups fear they may have to slash jobs in addition to the services they provide.

The Hangleton and Knoll Project is a community development charity in Hove, which employs more than 20 staff involved in a wide range of community projects.

The workers have helped more than 300 adults receive training to find employment, offer youth programmes and activities and run advice centres.

The trustees of the project applied for £45,000 of funding per year for the next three years and say the delay is having a devastating effect on staff morale.

Some staff fear for their jobs and are seeking alternative employment because of their own financial responsibilities.

Sarah Christie, who has been the project manager for two years, said: "This delay is having a terrible effect on staff morale and all we have been told is that the council has failed to make a decision.

"We really have been left in the dark and I have absolutely no faith that anything will change in September."

Most of the criticism for the delay is being levelled at the elected members of the city council for being unable to make a decision.

The applicants and the officers met their deadline and presented the recommendations to the council's Cabinet, which was unable to make a decision on the grants and delayed until September.

Ms Christie said: "I can't level criticism at the officers but I would like to ask the council what on Earth they are doing.

"If we don't get the funding then we will have to make reductions and the trust will have to make some very difficult decisions."

The charity Adventure Unlimited, of Edwards Street, Brighton, applied for a £10,000 grant to organise a bus service to pick up children who did not have funds for transport, from areas of Brighton and Hove, to take them to the activity schemes it runs.

It currently has a pick-up spot in Brighton but not all children can reach the meeting point because of a lack of resources.

The charity, which has been running since 1977 and in Brighton since 1985, may have to shelve its plan to run the pick-up scheme from areas of deprivation.

Paul Jarvis, spokesman for the charity, said: "It could mean we only offer the scheme to privileged children who can get to the pick up point.

"I think it's a great pity. We all met our deadlines and the officers met theirs but we don't know why the council members could not reach a decision."

The lack of promises of funding may affect the possibility of securing funding from other bodies.

The National Lottery often asks for evidence that a local project is receiving funding from its local authority before it will offer large sums of money.

Ms Christie said: "We are just about in the second year of three-year lottery funding and one of the questions when we had the assessor here was why wasn't the local authority funding your community development team.

"I had to say 'I suppose it's because they only have £1.5 million to divvy up between so many organisations.'"

Brighton and Hove Community and Voluntary Sector Forum carried out a survey of organisations in the city asking about their response to the delay.

A spokesman for the forum said: "This is yet another delay to what had been a long process and has identified service shortcomings which are not being rectified.

"Organisations are being restricted in their ability to plan long-term or to raise matched funding.

"This last minute, and wholly unexpected, change to the agreed process - to which there had been much consultation - adds doubt and uncertainty.

"It questions the commitment of the local authority to support, in practical ways, the community and voluntary sector."

Thirty-five organisations replied to the survey expressing their concerns.

They remained anonymous as some feared their comments may adversely affect their grant application.

One organisation said workers were "a little alarmed, as present funding actually runs out at the end of September, the build-up to the middle of July decision time was bad enough in terms of stress but the added delay is a disaster".

Another organisation said it felt betrayed by the council.

Some organisations said the news prompted staff to resign and three-year plans had "been knocked for six".

Colin Chalmers, director of Community Base, an umbrella charity based in Queen's Road, Brighton, which houses about 30 charities and voluntary groups, said many charity organisers were too worried to speak out about the funding delay for fear of losing their grants.

He said Community Base had not applied for funding but added: "The voluntary sector in Brighton and Hove offers very real services to people, the problem is the partnership between them and the council is very one-sided.

"For the council to hold back funding for this long cannot be described as doing the right thing. People are going to lose their jobs."

The council blames the delay on the change in the grant process.

It undertook an 18-month review of the grant process, which was conducted with full consultation with the voluntary sector.

Two voluntary sector workers were also seconded to work on the review, which was completed in January.

Judith Cousin, the voluntary sector manager for Brighton and Hove City Council, said the review decided it was best to change to a three-year funding programme, instead of the former system where grants were issued on a more historical basis.

The next process is linking the grant applications and the recommendations with the elected members.

The applications were put before the Cabinet who decided because there were three times more applications than money available, to further scrutinise the applications.

She added: "I understand their frustration but members are saying we want to do this right. It is difficult but it is a complex process."

Despite the delay, the council says the three-year programme may prove to be more beneficial to organisations as it could lead to groups being able to secure funding from other areas because of the lengthy funding commitment from the council.