The Government's decision to scrap school sport funding "seriously contradicts" its plans to encourage more competitive sport in schools, experts have warned.
As part of the Coalition's spending review, the Department for Education scrapped the #163;162 million a year PE and Sports Strategy in order to protect the overall schools budget.
In a letter to the Youth Sport Trust, which manages the strategy, Education Secretary Michael Gove said he was freeing up schools to allow them to provide more sport.
"The Coalition Government will encourage more competitive sport, which should be a vibrant part of the life and ethos of all schools," Mr Gove wrote. "We are committed to doing this through the creation of an annual Olympic-style school sport competition.
"The best way to create a lasting Olympic legacy in schools is to give them the freedom and incentives to organise it themselves," he added.
But according to Chris Dunne, headteacher of Langdon Park School, a specialist sports college in Tower Hamlets, London, the decision flies in the face of all of the Coalition's rhetoric on sport.
"(Scrapping the school sports partnership) is appalling news, it's just really quite devastating," Mr Dunne said. "It comes as the Coalition says it wants to support competitive sport in schools, but by ending the school sports partnership it is totally contradicting itself.
"I can confidently predict that as a result of this decision there will be a lot less competitive sport held in this country."
The Government's decision to drop the scheme will mean the loss of more than 3,000 jobs, and Steve Grainger, chief executive of the Youth Sport Trust, said the Government has risked any chance of an Olympic legacy, as well as the health of future generations.
"Just 20 months ahead of the Olympics, we're scrapping something that has over-delivered and is the envy of the world," Mr Grainger said. "This programme was helping the toughest schools, with the most serious health problems.
"While we welcome a school Olympics, trying to stage it without the framework in place would be like hosting an Olympics without any of the countries having any coaches or any national competitions," he added.