The Croydon-based London Mozart Players has had its funding withdrawn by the Arts Council.
It had been thought the much-loved chamber orchestra was going to be saved and the council reject a proposal to axe the £160,000 grant, but the decision was passed on Wednesday.
Instead the money will now go towards the regional promoter circuit, Orchestras Live.
A spokeswoman said: "Our existing funding agreement with London Mozart Players has been specifically to fund regional residency programmes outside London. But we are clear that our future investment in the chamber orchestra sector, and how we serve the interests of regional and rural audiences, will be best delivered through funding to Orchestras Live.
"We remain open to discussions with London Mozart Players about their future plans for work in south London."
Meanwhile, it was good news for Croydon Clocktower who were awarded a £40,000 grant for each of the next two years on top of their normal ammount, which is £54,213 for next year. The venue development fund will be specifically aimed around a programme of circus art.
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