Had the council voted in favour of the decision, 17 groups and organisations would have shared $47,500 worth of sponsorship, with another $1000 left over for ad-hoc sponsorship.

Under the proposal, the Shellharbour Sports Assistance Fund (SSAF) would receive $6000, down from the $10,000 it had previously received each year.

Councillor Kellie Marsh criticised the decision and said the SSAF should be allowed to continue to operate as it had for years.

"The Shellharbour Sports Assistance Fund just seems to be the gift that keeps on giving at Shellharbour Council," she said.

"I feel the cut to the Sports Assistance Fund from $10,000 to $6000 is not about the children, I think it's personal and I'm not happy with it at all.

"I feel that council is trying to dictate to a committee that's been running for over 40 years how they spend the money."

Councillor Helen Stewart also disagreed with the proposed amount for the SSAF, believing the council had guaranteed the full $10,000 for the SSAF for the 2013-14 and 2014-15 financial years.

Mayor Marianne Saliba defended the amounts of money that had been set down for each organisation.

"We have developed a sponsorship policy and we are adhering to a sponsorship policy that this council and all of you were involved in and have agreed to," she said.

"Every single one of those organisations on that list, bar two new ones, have taken a cut in the amount of money we provide them."

Cr Saliba said the council had agreed to run the SSAF's annual awards dinner, which would effectively give the SSAF $10,000 in total.

"That event cost them $4000 this year to run, so the $6000 given to the sports people and the $4000 it costs council to run the event still equals $10,000."