Sport England has cut its funding by £31.8m in an attempt to stave off financial problems.
Sport England distributes Lottery money to sport
The body, which distributes Lottery cash to sport, had frozen all payments to new schemes since December.
And on Tuesday 40 proposals that had previously been awarded funding have had that decision overturned.
The biggest cuts, £17.7m, will affect four English Institutes of Sport
in Norwich, Gateshead, Lilleshall and Holme Pierrepoint in Leicestershire.
The exact areas which will be affected have yet to be finalised.
"We had given a commitment to fund all these projects but they were all reviewed to make sure we are getting the right schemes moving forward," said Sport England chief executive Roger Draper.
"We do not underestimate the disappointment that some applicants will feel.
"But all the projects were thoroughly reviewed and we have not been able to agree to release funding for every project.
"We are telling people to have another look against the criteria we have laid down and maybe in the future bring them back on board."
The announcement follows a review by Sport England's chairman Patrick Carter, who ordered a freeze on funding when he took over in December.
Sport England's Lottery income has been falling steadily and the body has just finished a major reorganisation which cut staff numbers from 570 to 240, saving £12m a year.
A further 57 projects are being referred back to new regional sports boards for more work to be carried out on the proposals.
However, 108 projects worth £88m have been given final approval,
including the largest scheme - a £3m investment in the Portland Sailing Academy in Weymouth.
Draper said successful projects needed to demonstrate they would get more people into sport, keep them in sport, and achieve success at every level.