Two of Scotland's national companies reacted with anger last night after one of Scotland's biggest local authorities cut its share of funding.

Scottish Opera and Scottish Ballet have lost the tens of thousands of pounds they receive from the City of Edinburgh Council in a shake-up of the city's support for cultural and other groups, agreed by the authority yesterday.

Last night Alex Reedijk, the general director of Scottish Opera, said the cut was a "hell of a blow".

He added: "It is extremely disappointing in the light of the long-term relationship with the city, and also that we only had five days' notice of this cut - that is not what proper partnership is about - and now we will have to go away and consider our options. I am immensely disappointed."

Cindy Sughrue, the executive producer of Scottish Ballet, said she was disappointed with the decision and that it was bound to affect the level of activity the company has in the city.

Scottish Ballet received just over £40,000 from the council in the past year, and Scottish Opera just over £43,000, but the council believes they should lose their revenue support and instead receive funds for one-off projects. Sources at one of the companies said last night that no such funding seems to be available.

Ms Sughrue, who along with Mr Reedijk appeared before the council yesterday to make their case for support, said: "We are very disappointed that the City of Edinburgh Council has chosen to withdraw its funding after what has been a very successful and longstanding relationship."

She said the company would have to re-assess its plans for the future but that its level of activity in the capital was likely to be affected.

A spokesman for the City of Edinburgh Council said: "This decision in no way affects our recognition of the high-quality work of Scottish Opera and Scottish Ballet and we hope to identify project funding in the future. The council faces significant financial constraints and we are focusing resources on the Edinburgh Festivals.

"We are directing a large investment towards the development of the Usher Hall and because of that our priority lies with the funding of the RSNO and Scottish Chamber Orchestra, resident at the venue."

Papers before the councillors yesterday made plain the connection between the planned cuts and the recent movement of the national companies from the responsibility of the Scottish Arts Council to that of the Scottish Government.

The council papers said: "The Scottish Government took responsibility for all five national companies from April 2007 with combined investment of around £24m. It is proposed that a complete restructuring occurs for funding awarded from the council to the national companies."