Government spending cuts could cost voluntary organisations billions of pounds, it was claimed today.
Dame Suzi Leather, the chair of the Charity Commission, said cutting funding to charities that were providing key public services would be short sighted.
She told BBC One's Politics Show that the move could undermine Prime Minister David Cameron's Big Society project.
Many of the 160,000 organisations the Commission oversees provide key services for councils and rely on local authorities for funding, the BBC reported.
Dame Suzi warned that a cut in the amount of money going to children's services could mean more young people from deprived backgrounds ending up in police stations and the criminal justice system, presenting the taxpayer with an even bigger bill.
She feared up to £5bn could be cut from charities which would "pull the rug" from under Mr Cameron's Big Society idea.
The BBC said it had received a statement from the Cabinet Office which said it recognised the cuts would be challenging for some voluntary organisations, and it would work quickly to start a £100m short-term fund to help charities with funding shortfalls.
Dame Suzi told the programme: "If you cut the charities, you are cutting our ability to help each other, you are cutting what structures our neighbourliness.
"That is what Big Society is all about, so you are pulling the rug from under that."