A leading UK arts figure has accused the government of "a spectacular lack of logic" in handing lottery money intended for the arts to the Olympics.
Nicholas Hytner took over at the National Theatre four years ago
Nicholas Hytner, director of London's National Theatre, warned that cuts would lead to lower standards.
But Culture Secretary Tessa Jowell said the arts could cope with the drop of "a little over £100m over four years".
The London 2012 budget has more than trebled, with an extra £675m of lottery money to be used towards the shortfall.
Mr Hytner told the BBC's Ten O'Clock News the arts community recognised that times were "tough" financially and organisations such as his were "not asking for special treatment".
But he asked that the current funding levels were maintained.
Last month, Ms Jowell told MPs the new Olympics budget was £9.3bn
He said: "Past experience has demonstrated that a series of small cuts have a more dramatically destructive effect in our sector than they do in virtually any other sector."
The inability to plan ahead and maintain investment levels meant "almost immediately the quality starts to fall away", Mr Hytner added.
"We're raising the alarm now because cuts have been made.
"It would be grotesquely unreasonable for us to be expected to stay silent as we start to see, fairly early on in the game, money being taken from the arts allocation to fund the Olympics."
Ms Jowell said that to describe funding as being "diverted from the lottery" was "in a sense to misrepresent the purpose of the lottery".
Mr Hytner has overseen stage shows such as The History Boys
"The Olympics will provide an opportunity like no other to showcase not just sports, but also arts and culture," she said.
"The investment is not just in sport and the regeneration of east London but also in the cultural Olympiad."
Ms Jowell stressed that the government had promised "safeguards" that the money would not be withdrawn until 2009.
"This is not about arts projects that are running now and receiving grants now. This is much more about future plans and projects that may possibly be delayed."