Leading authors condemned as “churlish and petty” yesterday the Government’s decision to reduce the only funds that it gives directly to contemporary literature - particularly as 75 per cent of writers earn less than half the national average wage.

Speaking to The Times, Michael Holroyd, the biographer and former chairman of the Royal Society of Literature, said that cutting the funding to the Public Lending Right (PLR), by which authors receive 6p every time one of their books is lent by public libraries, was shameful.

The Department for Culture, Media and Sport (DCMS) is to reduce funding to the organisation from £7.68 million for 2007-08 to £7.4 million for 2008-09.

Mr Holroyd added: “The PLR is the only money that the Government gives directly to contemporary literature. They can’t do that. Such a small saving is a completely false economy. [The money saved] will not get anyone to an Olympic stadium.”

Tracy Chevalier, the author of Girl With a Pearl Earring and chairman of the Society of Authors, said: “Most authors can’t make a living off their work. The PLR is a very welcome contribution. For the Government to cut what is a reasonably small amount seems churlish and petty.”

She spoke of the irony of such cuts taking place in 2008 – designated as the National Year of Reading.

The PLR funds are being distributed this year to 23,942 writers, illustrators, photographers, translators and editors who have contributed to books lent out by public libraries. For 80 per cent of them, the contribution is vital to their income.

Simon Brett, chairman of the PLR’s advisory committee, said of the cut: “It’s serious. Everyone knew it would be a tough spending round, but almost all the other institutions looked after by the DCMS have got inflation taken into account into their settlements for the next three years. We haven’t. Saving less than £1 million seems mean.”

Payouts are capped at £6,600 but the average this year will be just £320.

Mr Brett said: “It’s particularly valuable for older writers whose books may not be in print, but whose books are borrowed and read in libraries.”

A recent survey of writers’ incomes showed that the median of all respondents was £4,000. Looking only at “professional writers”, it was £12,300.

A DCMS spokesman said: “Authors need not worry. The small cuts in funding should be absorbed in admin savings, so the rate per loan is unlikely to go down.”

Times Recommends

• No room for Baldrick in overstretched army
• Freecycle booms as middle class feels squeeze
• Marksman gets £5,000 over ‘serial killer’ quip