With less than two years to go until the London 2012 Games, the news comes as a blow to Visit Britain chairman, Christopher Rodrigues, who fears the cuts could jeopardise Olympic tourism.
"This Government understands the value Visit Britain brings to Britain’s tourism industry, but this is tough love," he said.
"Visit Britain will respond to the settlement by further cutting overheads and reducing its physical network overseas to retain as much money as possible for our global marketing effort."
Visit Britain is keen to capitalise of the unprecedented level of media exposure that the London 2012 Games will bring to boost Britain’s image abroad and will now be reviewing its Olympic tourism strategy.
"While this is a significant reduction in our funding, it does not change our objectives, which remain sound," said Visit Britain chief executive Sandie Dawe.
"Our aim now is to tighten our focus clearly onto the UK’s key markets: ones that are already delivering for us and those emerging markets that are key to our future."
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