Football Association general secretary Alex Horne has admitted he fears further public funding cuts next year because there may be no improvement in the game's participation figures calculated by Sport England.
Sport England announced a £1.6million cut over three years on the FA on Thursday and also reduced the cash that goes to golf, netball, hockey, mountaineering and rowing.
The funding body warned that a further 20 per cent of the money the FA spends on its participation programmes is at risk unless they improve.
But Horne believes Sport England's measure misses out the many people who may only play two or three times a month, and that the decline is also due to local authorities reducing spending on sports facilities.
Horne told Press Association Sport: "It is quite a blunt measure for team sports. I am sure there are many, many people who have a very active lifestyle, do cycling and running, and play football two or three times a month - and yet they are not covered by these participation figures which only reflect people who play every week.
"There is also no strong evidence that the numbers are going to be any better for the most recent year, looking at how wet it has been."
The number of people playing football every week has dropped by 100,000 since April last year to 1.84million.
In overall terms, the Sport England cut is pretty minimal given that the FA already spends £1million every week on grass-roots football, with most of its own money.
But Horne added: "The Government needs to be careful because this money is being spent on sports participation on one hand while on the other local authorities are cutting the local provision of sports facilities."
Sport England's chief executive Jennie Price defended the approach and issued a warning that sports needed to improve or face further cuts.
She said: "What we have taken from the FA is 10 per cent of the money they spend on their main participation programmes from next year but they could lose another 20% if they don't improve. All sports could lose more - we are going to operate this system every single year."
The overall funding reduction for the six sports is £2.8million.
Cricket, rugby union and badminton also experienced a decline in participation numbers but Sport England believes they have the right plans in place to reverse that decline.