As part of sweeping measures announced by the government last week, DCMS announced the withdrawal of its £5 million annual funding. DCLG contributes £7 million a year to the agency. As Planning went to press, discussions were ongoing.
CABE said it is disappointed by the decision, having worked hard with the government in recent months "to create low-cost ways to ensure that people can still get the practical advice and support they need to create a good-quality built environment". It insisted that it has not been abolished.
A DCLG spokesman said: "CABE does an excellent job providing communities with expertise about good design and spurring on industry to build better. It is important that its work is continued, but given the unprecedented economic conditions it is no longer possible for all its services to be funded by central government.
"We will be working with DCMS and CABE to ensure that the most valuable work is retained and local communities can put great design at the heart of shaping development in their area."
Meanwhile, the DCLG has identified the first senior posts to be lost following the reduction in its operating budget. The number of director-general posts will be cut from six to three, while administrative budgets are to be cut by 33 per cent over the four years to 2014-15.
Sir Bob Kerslake told staff that up to 40 per cent of jobs at the department might go. "Our department's role is altering significantly under the localism agenda. We'll do more enabling and less intervening. We'll be a smaller department but stronger and we will play a more strategic role," he said.
CB Richard Ellis head of national planning Ian Anderson said: "At a time when the development industry needs transparency and certainty in planning decisions, we could be faced with departments without the resources or training to embrace a new localism toolkit."