A valued scheme to increase the participation of children in artistic activities is to be axed by the Scottish Government.

The Cultural Co-ordinator project was a centrepiece of the last Holyrood administration's arts policies. Worth £2m a year, it allows each council to fund dedicated cultural teachers.

There are more than 100 staff working in the five-year-old programme across all 32 local authorities, introducing students of all ages directly to the work of artists, musicians, youth theatres, music, writers and museums.

However, cash for the scheme - described as a "vital link between the world of art and the world of education" - is to be stopped completely by 2010.

The Scottish Government informed the Scottish Arts Council at the end of last month that funds for the scheme will cease at the end of 2009 because of "tougher financial constraints".

One board member of a leading youth theatre company said last night: "This is a disaster: wrecking an initiative which has been of great benefit to the children of Scotland. It has been shown to be of great benefit, and the Scottish Arts Council have bags of evidence to show that. To axe it right now just seems counter-intuitive."

James Brining, artistic director of Dundee Rep theatre and former leader of TAG youth theatre, said: "This represents a backwards step."

Vicky Featherstone, the artistic director of the National Theatre of Scotland, said: "The National Theatre of Scotland values the Cultural Co-ordinators in Schools network and indeed recognises its contribution to our own success, across a number of initiatives we fully appreciate that the results of the spending review are tight but look forward to a discussion with the Scottish Government about how to recognise the value of this scheme and build on its achievements."

There is also disquiet among the councils which use the scheme. A senior local government source said: "It really is a great pity that the funding from this programme is not to continue, and further widen cultural participation in our schools and communities throughout Scotland."

The Herald has a copy of a letter in which Jim Tough, the acting chief executive of the Scottish Arts Council, admits to cultural co-ordinators that news of the cut will be "unexpected and contrary to the advice given in recent months".

Last night, a spokeswoman for the SAC said: "We regard the contribution of co-ordinators as immensely valuable to the development of young people's opportunities to access high-quality arts provision in their local community.

"It is our intention to meet with the Creative Links and Cultural Co-Ordinator representatives in the near future to look at the most effective role for the programme during the coming two years."

A spokeswoman for the Scottish Government said: "The government values the achievements of individual co-ordinators and their managers, as well as the overall success of the programme.

"We remain committed to widening access to culture."