Chris Pugh holds two world records for the 200-metre butterfly and 400-metre freestyle and was one of the youngest Paralympians at the Sydney Games in 2000.

But, far from having his talents backed, the 24-year-old swimmer from Lancashire had his funding cut when athletes with learning disabilities were banned from the Paralympics following a cheating scandal involving the Spanish basketball team.

He is among an estimated 60 British athletes who will be denied the chance to shine on home soil in London 2012 by a ‘Catch-22 situation’ regarding eligibility for the Paralympics, social campaigners say.

Mencap, the learning disability charity, today demanded the government immediately reinstate their National Lottery funding while Paralympic chiefs continue to debate more robust entry criteria for mentally disabled competitors.

A blanket ban was introduced after Sydney, when most of Spain’s gold medal-winning basketball team were found to have no disability. The ‘intellectually disabled’ classification, introduced in Atlanta 1996, was only open to people with an IQ below 70.

The ban will be reviewed by the International Paralympic Committee (IPC) following the Beijing Games in August and campaigners are hopeful it will be lifted for London 2012. Athletes with learning disabilities were this year reinstated to the UK School Games under the threat of legal action for discrimination.

But, in the meantime, athletes are struggling to train or compete because they have lost their grants from UK Sport, the elite funding agency.

“It’s a Catch-22 situation and we have to unlock it in some way,” Dame Jo Williams, Mencap’s chief executive, said. “Without immediate funding these talented athletes will not be physically ready to compete in 2012. This would be a terrible disgrace and would be hugely embarrassing to London. These athletes are competing for Britain, and they should be supported to do so.”

Mencap estimates that each athlete needs up to £10,000 a year to train at the highest level. Some, like Thomas, 28, a 100-metre sprinter ranked fourth in the world, were forced to give up (he even put his legs on a train track in the desperate belief he would be allowed to compete if he was physically disabled. He was not injured.)

Others, like Ben, 18, a swimmer, have carried on with family support. His grandparents, who raised him because his mother also has a learning disability, moved from the north of England to the south-west to be close to a swimming academy. “Since Ben’s funding was cut we have spent over £5,000 a year supporting him: training, travel, event entry fees, hotel fees, kit and equipment, the list goes on,” Dilys, his grandmother, said. “I fear that many athletes will drop out of sport altogether and so will Ben if 2012 is not a possibility.”

The ban has left athletes disillusioned. David Pugh, Chris’s father, said. “I will never forget the day Chris found out it would not be lifted for Beijing. He never really cries, but that day there were tears streaming down his face. He was devastated.”

Even without funding or access to a training centre in Manchester, Chris, who won seven gold medals at the European Championships in 2002, continued to compete until last year. But, after missing out at Athens 2004 and Beijing this year, he said he eventually became “fed up” with the system.

“I was forced to stop when I was at my absolute peak. I was improving all the time. Who knows how good I could’ve become,” he said. “It’s finished for me now but it’s not too late for others.”

At the Sydney Paralympics, Britain was represented by eleven athletes with a learning disability. They came home with five silver and three bronze medals in athletics and swimming.

UK Sport said the ban had only affected funding for 10 British Paralympians. “We have to fund according to Olympic and Paralympic success. If they are back in the Games then the funding will flow accordingly,” a spokesman said.

Dame Tanni Grey-Thompson, Britain’s most successful Paralympian, said: “They have to get the classification right. There is no will to stop them coming back into the Paralympic movement.”