The government has promised mothers choice by 2009
Maternity services are being pared back, putting the care of women at risk, midwives say.
Staff are being cut and training funds raided as the NHS racks up debts, the Royal College of Midwives reported.
A poll of 102 out of 216 department heads found two thirds thought their units were understaffed and one in five had lost staff in the last year.
The government said midwife staffing was set to increase and services were "safer than ever before".
The midwives who responded to the survey reported that 66% of their trusts were in deficit in 2005-6.
Of those who had lost staff, the average decrease was 3.5%, with evidence emerging trusts were increasingly relying on maternity support workers, who are not qualified midwives, to fill the gaps.
The college also found trusts were cutting training budgets, with one in five reporting the entire funds had gone and a similar number saying three quarters had gone.
The results come at a time when the government has pledged to improve access to services.
Ministers have promised that by 2009 women will have a choice of where they give birth and have a named individual midwife to care for her.
But the college said the country's 40,000 midwives were struggling to provide good care.
Louise Silverton, the college's deputy general secretary, said: "Heads of midwifery are in charge of making sure that women have a good birthing experience and that is very hard when cuts are being made.
"It is somewhat ironic that although there is a clear need for new midwives, there is apparently no money to employ them.
"There is also a significant risk of overall care being compromised as we have evidence of severe restrictions on the provision of postnatal care to women."
And she added the government risked breaking its manifesto pledge if the situation was not reversed.
"This survey should make it very clear that maternity services are being pared back at a time when the government's manifesto pledges to give all women choice over where and how they give birth as well as being supported by the same midwife throughout her pregnancy
"Unless midwifery services are expanded there is no hope of these manifesto commitments being achieved."
But a Department of Health spokesman said midwife staffing levels had increased since 1997.
And he added: "Maternal mortality is as low as it has ever been, as are rates of infant mortality.
"Giving birth is safer now than ever before.
"We are working with midwives and obstetricians on an NHS reform plan which will enshrine the principles of safety, quality and choice.
"Thorough increased investment in training staff and finding ways for midwives to come back to work in the NHS, we expect to see further increases in the midwifery workforce."