The England and Wales Cricket Board will fight tooth and nail to stop future home Ashes Test series being reserved for free-to-air television.
The government was formally advised on Friday to add the national flagship cricket series to the list of events that cannot be shown on pay TV.
But an ECB insider warned 23,000 coaches employed through BSkyB cash could lose their jobs as a result.
And he said counties were already worried about possible bankruptcy.
Of the 18 counties playing first-class cricket and employing full-time professionals, nine own grounds which host Tests or one-day internationals. But the other nine are unable to recoup cash that way.
606: DEBATEInstead, they survive largely on a mandatory £1.5m annual grant which originally emanates from the lucrative TV deals negotiated with Sky by ECB chairman Giles Clarke.
The ECB feels those grants would be massively slashed if Sky was unable to bid for exclusive live rights for all cricket played in England.
The source said the national board was "deeply disturbed" by the development, and felt the government's year-long review process into listed events, headed by former FA executive director David Davies, had been "deeply, deeply flawed".
Davies promised to start the review process "with an open mind", but the ECB feels it has not listened to advice detailing the economic impact of listing home Ashes Tests.
It now plans to conduct its own review which will outline exactly how the cuts in funding will affect the game, ahead of a possible appeal if - as expected - the government decides to implement the recommendations.
Derbyshire chief executive Keith Loring did not take quite such a dim view of the future, but warned that the ECB, BSkyB and the counties themselves could form formidable opposition to the government and the free-to-air broadcasters.
He told BBC Sport: "The current deal with Sky goes up to 2013 and we wouldn't be issuing contracts that take us beyond 2013 if our income was going to dramatically drop.
"It's possible that we'll all have to make certain measures, but normally sense prevails. What we shouldn't do is to get too carried away before seeing what is being recommended and what Sky's reaction to those recommendations will be.
"Then we have to look at what the terrestrial TV companies bid, then see what's left and what the effect is.
"If we don't believe it's going to be right for cricket, then the 18 counties, their members and supporters' groups are going to make quite a lot of noise.
"But there's no point getting depressed about decisions that are not going to hit us until 2014."
Loring insists the ECB handouts to counties are scrupulously governed, with counties only awarded the full cash amounts if they promote young home-grown players.
And he says his own county has made huge strides in recent years to get three players into the England under-19 squad and two into the Academy.
The improvements made by counties like Derbyshire, were the Sky millions to be withdrawn, could be jeopardised, says Loring.
"The grass roots are going to miss out and smaller clubs will fold and go away"
But others are happy to look at the bigger picture.
Former England captain and record run-scorer Graham Gooch, speaking to Radio 4's The World At One, said: "This is great news for a lot of people in this country who don't have access to satellite TV.
"They'll get to see some Test match cricket at least every four years in the UK, that's a big bonus for the cricket public in this country."
He did, however, concede that there was a difficult dilemma to resolve.
"The game could suffer at grassroots - that's always been the spin-off - in as much as, yes, the game needs the money but you also want people to see it."
But another former England pro, all-rounder Dominic Cork, told BBC Radio 5 live other broadcasters may not show the commitment to the game that had been offered by Sky in the past.
Cork said: "Sky has televised under-19 cricket and women's cricket as well - are the BBC going to show it?
"I completely understand that people who don't have Sky will now be able to see live Test cricket, but the grassroots are going to miss out and smaller clubs will fold and go away."
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