The photo montage to 2012 says it all. Louise Jukes has pinned her dream to her bedroom wall. The faces of family and friends make up the numerals of the year in which she expected to be representing her country at the London Olympics.

But the bigger picture has become horribly blurred for the 24-year-old from Ipswich, who is one of hundreds of British athletes left in limbo by this week's decision to freeze public funding for 12 Olympic and Paralympic sports after a shortfall in the £300 million campaign for medals in 2012.

Unlike most, who have been commiserating with loved ones, Jukes has been left dangling hundreds of miles from home on the outskirts of Aarhus, a coastal town in Denmark, after Great Britain embarked on an interesting sporting experiment. The former physiotherapist is among 30 British handball players who dropped everything to live in a country where this fast contact sport - a bizarre game of catch to the few in Britain who have even seen it - commands its own slot on prime-time television.

Until Wednesday they had every reason to think that they were on course to becoming the stars of the 6,000-seat handball arena being built in East London. They had been sold the 2012 dream by Lord Coe, the double Olympic 1,500 metres champion running the Games, and Sir Steve Redgrave, the five-times gold medal-winning rower, who helped to recruit many of them from rugby, basketball and netball through a national talent identification scheme.

That dream lies in tatters after UK Sport, the funding agency for elite athletes, revealed that handball - along with seven other Olympic sports, including shooting, fencing and volleyball - would be hit with budget cuts as part of a “no compromise” quest for medals.

Handball officials, who had received about £3 million over the past three years to build a national squad from scratch, will know next month their share, if any, of a £12 million fund set aside for the 2012 “no-hoper” sports.

Their lottery cash runs out in March. The worst-case scenario is no British representation in 2012; the best is that less competitive teams take to the court having been cut off at the knees. What is likely is that the expensive Denmark set-up is unsustainable. “It's gutting,” Jukes, who played under-18 hockey for England, said. “It's difficult to take after all the hard work we've put in and the things people have given up. I don't want to return to my old life. I would like to be in the Olympics.”

To understand how the Britain handball teams find themselves stranded in Denmark, it is necessary to step back to July 2005, when London won the right to stage the Games. Few cheered louder than the minority sports that get a look-in only once every four years. But here was a unique opportunity to showcase sports with no British heritage, courtesy of the host nation's right to enter every discipline.

Handball was the perfect guinea pig. Played in more than 170 countries by men and women, it is an indoor sport - ideal, given the British weather - and is simple enough (run, catch, throw, score) to be introduced to children from an early age. It ticked all the boxes for a development sport with social benefits.

So, serious money was thrown at it. The British Handball Association (BHA) saw its budget soar from £7,000 to £2.9 million overnight and a world-class training programme was created. For the first time the players were supported by lottery grants and a proper coaching structure. The aim was to finish in the top eight, out of 12 teams, in London, and possibly win a medal.

Lynn McCafferty, 29, the women's captain who has been playing handball since she was 10, left Scotland two years ago to follow the dream. “There was nothing logical in my decision - I was getting married, we'd bought a house and I had started a job I'd waited ten years to get,” she said. “But my heart said go. To compete in the Olympics, I couldn't do it in Britain because there aren't the facilities. But in Denmark handball is the equivalent of football.”

She has been apart from her husband, Gary, who was in the men's squad until injury struck, for a year. But the sacrifice may have been for nothing. A funding gap in the 2012 budget exacerbated by the credit crunch has prompted a business-like reaction from Olympic officials focused on fourth place in the medals table - the feat that the team achieved in Beijing in August.

British handball feels sold out. “They have done more than just raise hopes,” Lorraine Brown, the BHA performance programme manager, said. “People have changed their lives and invested their hearts and souls. I feel very despondent. We have created something from nothing and the rise has been meteoric. What more could we have done?”

The benchmark is South Korea, who also had no pedigree in the sport but won a gold and a silver medal (women's and men's respectively) in the Seoul Olympics in 1988.

Jesper Holmris, the head coach of the Britain women's team, was sceptical when he joined the project in January, but he now believes that they could compete with the best in 2012, with the quarter-finals a realistic aim. “Everybody knows we are on the right track,” he said. “It would be strange if they could not find the money.”

There are those who argue that Britain should not even be trying and that the £3 million that has been spent was a waste of lottery money. The players admit that friends at home do not understand what they are doing.

To see them in Aarhus, which has more than three times as many registered players as Britain, is to be reminded of the Jamaica bobsleigh team at the 1988 Calgary Winter Games, who inspired a Hollywood film, Cool Runnings. But whereas there was never going to be momentum for a winter sport on a Caribbean island, handball is well suited to the British culture. It just needs the exposure.

Huw Goodwin, a 26-year-old former rugby player from Aylesbury, Buckinghamshire, left a job in clinical psychology for something that he had only watched on television. “If the British people saw it at the Olympic Games, they would take to it,” he said. “Of course, winning medals is important, but the bid was won on changing the sporting landscape in Britain. If we don't, it will be like any other Games.”

Throw, catch, score

— Handball involves two teams of seven players (six outfield players and a goalkeeper) who pass and bounce a ball to each other and try to throw it into the opposing team’s goal.

— A game is split into 30-minute halves and is played on an indoor court measuring 40 metres by 20 metres. Women play with a 325-400g leather ball and men with a 425-475g ball.

— A contact sport, it is illegal not to try to attack and penalties are awarded for passive play.

— It is the second most played sport after football in European countries, including Denmark, Norway and Germany.

— It became an Olympic event for men at the Munich Games in 1972 and for women in Montreal in 1976.