Welsh National Opera's funding from its single biggest backer, Arts Council England, is to be cut by 6.9% next year.
The English grant for the arts organisation, the biggest in Wales, will fall from £6.76m to £6.29m.
The arts councils of England and Wales are major sponsors of WNO.
The Arts Council of Wales' funding for WNO is due to announce its plans for next year in December. The opera company has refused to comment.
WNO performs in both Wales and England as well as internationally.
Its current production of Beethoven's Fidelio is being shown to audiences in Bristol, Liverpool, Birmingham, Southampton and Oxford as well as Cardiff, Swansea and Llandudno.
WNO has been used to knowing the funding it is to receive from Arts Council England for three years.
Currently, it has information about that support for only the next financial year.
Staff are on a wages freeze and there is already a policy of non-automatic replacement when people leave posts.
Arts journalist Mike Smith, who has been following the opera company's fortunes for 25 years, said WNO performs "far more" to English audiences.
He said: "You could see not only fewer performances, but perhaps, but more importantly, fewer new productions."
BBC Wales political reporter Mark Hannaby said the grant reduction by the England arts body, when combined with inflation, could see WNO having to make savings of up to £650,000.
He said an independent report in July put WNO's impact on the Welsh economy at £22.5m, around five times the size of its Welsh arts council grant.
He said: "There are cautious hopes that, even at this fraught time, WNO's Welsh funding might avoid a cut, remaining at that £4.5m standstill, or might even rise.
"[Arts Council of Wales] has been through an investment review to prioritise high quality work.
"The idea is that it funds groups that can thrive rather than just survive."
WNO has declined to comment.