Sport England has given a funding boost to six sports but has warned that they must make improvements before receiving further investment.
Tennis, swimming, squash, fencing, basketball and table tennis have all been granted funds to increase levels of participation.
However, some of the money has been held back from the governing bodies of tennis, basketball and squash.
Funding will be provided directly to programmes at grassroots level.
"There are tough messages here for national governing bodies," said Sport England chief executive Jennie Price.
"If they don't grow participation, we will reduce their funding and we won't make long-term investments until we have confidence in their ability to deliver."
This is how the six sports were affected by Sport England's measures:
- Tennis: The Lawn Tennis Association (LTA) is regarded as having made good progress and has been awarded £1.9m for the next year. There will, however, be a 20% reduction for the 16-25 age band, reflecting the failure to achieve targets, but the LTA's education and satellite club activity will receive £360,000 a year.
- Swimming: Not enough evidence of the Amateur Swimming Association (ASA) changing behaviour towards swimming. Sport England has given a further one-year investment of £3.5m to help the ASA increase the number of people who swim regularly.
- Table Tennis: After investing £2.27m into the English Table Tennis Association in 2012, Sport England believes the sport has made "good progress" and will invest a further £2.3m over the next year and an extra £1.2m for core funding up to 2017. It has committed a further £250,000 for recreational projects.
- Squash: Sport England believes "the number of people playing the game regularly continues to decline", which has resulted in them committing £1.25m next year for the English Squash and Racketball's talent and elite programmes. It includes a 20% reduction (£355,000) for participation programmes.
- Fencing: Another that has disappointed Sport England, but it has still been awarded £1.33m. That covers £250,000 to support participations programmes, a £750,000 investment in talent over three years and £330,000 for core costs over the same period.
- Basketball: Sport England decided not to award the £3.2m ring-fenced for England Basketball because their participation plans are "not strong enough to merit a substantial further investment". They plan to increase the total investment to £9m between 2013-17, concentrating mainly on grassroots sport.
LTA chief operating officer Nick Humby said: "We know that we have more to do and that change takes time, but we have started to transform our approach to participation by building effective partnerships and we are determined to change the long-term trend."
Minister for Sport Helen Grant said: "I am encouraged that many sport governing bodies are upping their game to increase participation and we must not forget that 1.5m more people are playing regular sport than in 2005, when we won the right to host the 2012 Olympic and Paralympic Games.
"But the message to underperforming sports governing bodies is clear: if you can't deliver, then funding will be taken away and given to projects and people that can."