Sport England is to cut the funding available to England Basketball by £1.2m.

According to Sport England, the association's four-year funding had been structured to encourage it to increase participation outside its core clubs and members.

This incentivised funding included the axed £1.2m grant which was dependent on England Basketball's ability to produce a "robust strategy" for growing the whole sport.

The Sport England board concluded that England Basketball's plans "do not adequately address the challenge" of increasing participation.

Sport England added that the decision was made partly on the fact that its Active People Survey (APS) shows the number of adults playing basketball at least once a week has declined from 186,000 at the start of this funding period (October 2008) to 154,100 at the latest update.

However, the APS results also suggest that participation had been increasing, as the current number of active players (154,100) measured in January 2011 is higher than during the last APS survey announcement in October 2010 (151,800).

Sport England's chief executive, Jennie Price, said: "England Basketball has not demonstrated the necessary focus on improving its plans for increasing participation, despite continued support and encouragement to do so. This was an important factor in our decision."

As a result of the decision, England Basketball's 'whole sport plan' revenue funding will not see the potential increase over the next two years. Subject to performance, it will now remain at its current level of £1.35m per year until March 31 2013.

Jennie Price added: "The Board has not taken this decision lightly, but from the outset of this funding period Sport England has been clear that poor performance would lead to a governing body's overall funding levels being reviewed.

"As an investor of public funds, we have a responsibility to ensure that our investment is properly managed and delivers value for money. We remain firmly committed both to the sport of basketball and to working with England Basketball on our remaining investment to support the development of the sport."