A senior Lambeth councillor has alleged that there has been "been a significant degree of misunderstanding and misinformation" about the withdrawal of council funding for the Centre for Young Musicians at Morley College.
Every Saturday hundreds of children attend music classes at the Centre for Young Musicians for a mix of individual tuition, choir sessions and work in ensembles.
Although CYM's pupils come from around the capital, the largest single group of pupils is from Lambeth.
Last autumn a row erupted over claims that Lambeth Council had withdrawn funding of £18,000 for children from the borough to attend the centre, despite the council having cited the CYM in a successful application for Arts Council funding for music education.
The controversy received national publicity in the Daily Mail and Private Eye. An open letter signed by CYM parents and staff was published on the Brixton Blog in November.
"Lambeth recently obtained £720,000 of funding from the Arts Council, payable over three years, which would help finance local Lambeth children to study at the Centre for Young Musicians in Waterloo," said Cllr Dodsworth.
"Although the first tranche of the funding had been paid, the council withdrew this subsidy with virtually no notice given to the Centre for Young Musicians or to the children.
"Can the cabinet member explain why and when this decision was made and explain what the council is spending this money on instead, given that the grant is ring-fenced for music education?"
In her written response, Cllr Rachel Heywood, cabinet member for children and families, said: "I would like to thank Cllr Dodsworth for the opportunity to set out the circumstances surrounding this issue clearly and factually, given that there has been a significant degree of misunderstanding and misinformation in relation to the case to date.
"The Centre for Young Musicians has never been funded from the music grant. CYM is an independently run Saturday school, unconnected with Lambeth Council."
She explained that the council had provided a small amount of discretionary funding via a Department for Education grant for gifted and talented children.
Cllr Heywood claimed that Lambeth Council first informed the CYM of the likely withdrawal of this funding as early as March 2011, and that CYM itself had made clear to pupils and their parents that the council grant would not continue in perpetuity.
She added: "Music education grants have never been used in Lambeth to subsidise individual children or families and it is unreasonable to expect Lambeth to provide grants to fund independent music education institutions operating in Lambeth and London, especially in the current financial climate and with the coalition government's punitive cuts impacting heavily on our core services."
The written reply continued: "In Spring 2012 music organisations, including CYM, were informed verbally of our inability to provide funding, and the director of CYM wrote a letter to his CYM parents in July 2012 informing them of the uncertainties of funding from the new award of the music grant."
The council says that the £720,000 Arts Council grant will be spent on music projects in Lambeth schools.