The sport had won a reprieve last year and handed £7million over four years – but three years’ of that was conditional on meeting performance targets, which were missed.
British Basketball’s performance director Roger Moreland said the sport was “aghast” at the decision, which would have severe consequences for its future development.
Funding has also been withdrawn from synchronised swimming, water polo and weightlifting, while a number of sports deemed likely to win medals at the Rio 2016 Olympics have had their funding increased.
Moreland said basketball would launch an appeal, and claimed there was a worrying gap in the funding system for elite sport which punished those that were developing but not at medal level.
He said: “There is a gap in the system and is appears to show a bias against team sports and emerging sports. Hockey is the only Olympic team sport now being funded.
“Is there no place in this system for a sport like ours which already has a huge participation base, bigger than rugby union and cricket, and is the second team sport to football, rather than just targeting medals?
“This will mean cutting in half the coaches, the training programmes, the sports science and sports medicine programmes on the road to Rio.
“UK Sport decided not to fund basketball in December 2012 and have done so again. As we asked then, we ask again – what price a legacy from 2012?”
Liz Nicholl, chief executive of UK Sport, insisted that giving money to basketball would have diminished real medal chances in other sports, and that the body had to stick by its strict “no compromise” approach. She also denied there was any bias against team sports.
She said: “We do not take into account participation figures – we are totally focused on medal potential. It is disappointing for basketball but, if we compromise our investment and fund sports that have not got a realistic prospect of winning medals, we will compromise those sports that can deliver.
“There is not a bias against team sports – we are funding hockey, wheelchair basketball and wheelchair rugby.”
Nicholl also denied it would prevent basketball developing athletes to become role models.
“They are hardly role models if they are not winning – they become role models by winning,” she said.
The decision was also blasted by the British men’s team captain Drew Sullivan, who told the BBC: “I’m desperately disappointed not only as a player but also as a parent. I’ve got two daughters and, when they see me pulling on the GB jersey, all they say is: ‘Dad, I want to play for my country too’. So for me, as a parent, what hope do they have to achieve their dreams if it doesn’t seem like it’s too important to UK Sport?”
Several sports get funding increases with the big winner being triathlon, whose money goes up from £5.5m to £7.5m, a 36 per cent increase. Others with increased funding include canoeing, fencing, gymnastics hockey, judo, sailing, shooting and taekwondo.
Sports whose funding has been cut are swimming and badminton, while money for all other sports remains the same.