Scores of community groups and voluntary organisations are facing closure because a council has delayed £1.3 million in funding.

Although 131 groups applied for cash before the March 31 deadline, the council has still not decided who will get what.

It means aid may not be paid out until January and community centres, youth and elderly groups, playschemes and advice organisations which were expecting money in September face an uncertain future.

Community and Voluntary Sector Forum co-ordinator Anna King said: "We asked groups what the impact would be on them and they said they faced making redundancies and potential closure.

"This is core funding for this sector and this is a disaster zone for community groups."

Paul Jarvis, chairman of trustees of the Community and Voluntary Sector Forum in Brighton and Hove, which represents more than 300 community groups and charities, said: "We are extremely concerned about this delay, and in particular, the effect it could have on people in need in our city.

"This whole situation is very unfortunate, given the great progress that has been made in recent times in strengthening the relationship between the council and the many charities and community groups that provide vital services across the city.

"We need councillors to explain exactly why they have made this decision and we need them to start taking their agreements seriously."

Each year the groups apply to Brighton and Hove City Council for grants to help them to carry out their work within communities. The grants range from £8,000 to £30,000.

But so far this year, the authority has only given a quarterly interim payment to some organisations.

Councillors were due to decide this month how much money the groups would get and cash should have been available from September.

But the decision-making process has been delayed until September 12 and organisations will not get full funding until January.

The delay is being blamed on a revamp of the grant application process following a Best Value Review, a Government initiative designed to ensure the council gives taxpayers the best service for the money spent.

An 18-month review, which ended in January, was carried out with full consultation with voluntary groups and two voluntary sector workers who were placed on secondment to the council for the consultation period.

The new system means instead of getting grant aid for a year, groups will receive money over a three-year period.

The council said the complexity of changing the process had led to the delay.

But community group leaders are worried and have inundated the Community and Voluntary Sector Forum with telephone calls.

Ms King said: "Thousands of people that use community services are reliant on this money but the groups that deliver them don't know whether they're going to be funded.

"It's causing all sorts of problems for the people running the groups, many of whom are volunteers, and there appears to be no further information available from the council to help them."

She added: "The sad thing is that it was only in March that we celebrated the signing of a compact between the community and voluntary sector and local authorities.

"This is an agreement about the ways we should expect to communicate and deal with each other, trying to form a level playing field so that we can work together better.

"A key aspect of this is the need for high quality communications and sticking to agreements.

"In this case with the council, there seems to be no further information available about why the decision is delayed and the deadlines have been missed."

Judith Cousin, the voluntary sector manager for Brighton and Hove City Council, said: "I understand the groups' frustration but the members are saying 'we want to do things right'."

She said the council would no longer be offering grants along historical lines but on a three-year programme starting this year.

She said: "The new system will be less bureaucratic and it makes the groups more sustainable and it also enables them to draw down from other funding because they may have a three-year funding commitment from the council.

"There are always two sides to a story and we understand the delay is a disappointment."