More than £1m of funding has been cut from a body providing business support in some of the poorest areas of Wales.
Venture Wales helps businesses in some of Wales' poorest areas
Venture Wales, which helps more than 1,000 companies every year, has seen its budget fall to £300,000.
Opposition parties are linking the cut to the absorption of the Welsh Development Agency (WDA) into the Welsh Assembly Government.
The assembly government said it was changing the business support system to improve its effectiveness.
Venture Wales managing director Philip Cooper has expressed his concern, claiming the reduction means it will be able to help only 200 firms this year.
The organisation has more than 1,000 clients on its books and is expecting 500 more in the coming year.
Venture Wales, as part of the WDA, had a network of business support advisers who aimed to help small and medium-sized businesses grow and develop, boosting the economy and increasing employment.
The organisation also "parachutes" executives into companies that are in trouble in a bid to turn them around and make sure they do not go under.
Plaid Cymru leader Ieuan Wyn Jones said hundreds of businesses in south east Wales would be affected by the funding cut.
He said opposition parties had been assured that the merger of the WDA would not result in any cut to services.
He has called on First Minister Rhodri Morgan to offer immediate reassurance that businesses that had support from the WDA would not lose out on the support they need.
A spokesman for the assembly government said it wanted a simplified system instead of lots of individual programmes separately marketed by a range of contractors.
The spokesman said the main change was the merger of two programmes, New Business Starts and General Business Advice Service, to form one unified service.
These and other streamlining changes were being made because they had been called for by the customers using the services.
It said it believed they would create a "much more efficient support system to new and growing firms".