The Greater London Assembly has today demanded “urgent clarification” following reports that the London Development Agency was set to lose its £156m non-Olympics budget in the next financial year.

Len Duvall, the chair of the London Assembly’s economic development, culture, sport and tourism committee has written to the mayor’s economic development adviser to ask whether funding for the LDA will continue next year.

Senior LDA sources have reportedly found out that, from April next year, the body will only be able to fund projects that it has legally committed to.

The news comes despite the government having indicated that the LDA would be spared the worst of the cuts, with the eight regional development agencies being officially dismantled by April 2011.

Until now, the LDA had been waiting for a decision on whether it should be merged into the mayor of London’s office, but without any funding, that would no longer happen.

More clarification is expected when the Department for Business, Innovation, and Skills spells out how it plans to implement the budget cuts announced in last week’s spending review.

Duvall said the spending review had raised serious doubts about the long-term feasibility of all LDA-funded programmes.

He said: “Without an obvious funding stream, how will the mayor be able to deliver his statutory responsibility to promote economic development in the capital?

“We want urgent answers from the mayor’s office about the future of the economic development priorities he has identified and the potential consequences for London if they are abandoned.

“I am concerned that an LDA stripped down to the bone, and folded into the GLA, will simply not be able to deliver these functions.”

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