Twenty million pounds of funding aimed at regenerating deprived areas of Croydon could be in jeopardy following a budget announcement by the Government.

Chancellor Alistair Darling announced during the Comprehensive Spending Review last week that the £77million that Croydon was supposed to be receiving in funding through the Local Enterprise Growth Initiative (LEGI) may be unavailable in the future.

This is due to a shift in funding from LEGI to a new Enterprise Renewal Fund.

The news could put the future of Croydon Enterprise - the group formed as a result of the LEGI bid in doubt.

Councillor Mike Fisher, leader of Croydon Council, said: "This announcement will be a real kick in the teeth to the people in Croydon that have been working so hard to revitalise areas such as Thornton Heath and New Addington.

"We believe that next year we will receive the same amount of funding but it is the long-term funding that we have concerns about and we will have to readdress those when the time comes.

"What the council want to stress is that this is a national decision and not a council one and Croydon will be badly affected but we will resist any pressure from the Government in every way we can."

However, local Labour group leader, Councillor Tony Newman, believes the Conservative council has jeopardised a golden inheritance'.

He said: "By failing to deliver on LEGI, the Conservative council has potentially squandered a golden inheritance.

"That is why Labour councillors have asked numerous official questions in the last 12 months, asking why so many jobs for officials were being created, instead of the money really going to local enterprises to increase real job opportunities in the parts of the borough that need them most.

"This money could have been a great asset to young people in the areas that need our help the most."