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Broadcaster S4C is to suffer a £2m cut in its funding this year as part of the UK government's budget cuts.

S4C's budget is paid annually as a £100m grant through the Department for Culture, Olympics, Media and Sport (DCMS).

DCMS confirmed the cut saying all organisations it funds would have to help meet its £88m savings target.

Shadow Welsh Secretary Peter Hain said the cuts would "damage the digital economy Wales must become".

A DCMS spokeswoman said its core funding was being reduced by £61m as a part of £6.2bn spending reductions to tackle the UK's deficit unveiled by Chancellor George Osborne.

Another £27m of cuts would come from the budget of the Olympic Delivery Authority, which the department is also responsible for.

Commenting on the cuts Welsh Secretary Cheryl Gillan told ³ÉÈËÂÛ̳ Radio Wales: "Our top priority is to reduce the deficit. None of this is going to be easy.

"There are going to be difficult decisions across the board."

Mr Hain said the cuts would put at risk S4C's value in enhancing Welsh language broadcasting and supporting the growth of the language, and hamper the development of the Welsh creative industry.

He said: "The £2m cut will damage the very Welsh businesses who are part of the creative industry sector which is so important for the digital economy Wales must become.

"That requires investment to support new technology jobs of the future, not cuts."

"This will doubtless be the first of these cuts on S4C's budget, forcing widespread highly skilled job losses and business bankruptcies."

Plaid Cymru AM and assembly Heritage Minister Alun Ffred Jones said Plaid Cymru would "fight the Tories" in order to protect the broadcaster's future.

"In Wales, there has been cross party consensus on the need to protect funding for Welsh language broadcasting and to ensure that the channel serves the cultural, and economic needs of the nation," he said.

"It is typical of the Conservative Party to pick a fight with the Welsh language only weeks after coming to power despite their MPs promising during the election that there would be no threats to the future funding of S4C.

"At this time the Secretary of State should also be fighting Wales' corner against her party's threat to cut the promised additional television news service for Wales in the English language."

A spokesman for S4C confirmed the cut and said it would "endeavour to ensure that this reduction will not directly affect services to viewers."

He added: "However, any further reductions in S4C's budget will have to be considered in terms of the adverse effects on services, and on S4C's economic impact."