Newcastle City Council has slashed funding to the arts by 50 per cent despite public protests backed by high-profile artists.
Top musicians Bryan Ferry, Sting and Mark Knopfler of Dire Straits were among those who signed a joint letter to the council condemning its plans.
But councillors agreed to scrap its £1.2 million core arts budget on Wednesday night and replace it with a £600,000 culture fund.
Libraries will be among services to be hit.
Angry protesters demonstrated at the council meeting and there were jeers and shouts of "shame" from the public gallery.
Council leader Nick Forbes said he was "deeply angry" that every grant the authority receives is being slashed by an "unfair government."
He said the cuts were being made "with a heavy heart and much soul searching."
The latest round of cuts will see £100m axed from Newcastle council's budget.
In a blatant display of hypocrisy Newcastle Lib Dem leader David Faulkner, whose parliamentary colleagues are making the government's attacks on councils possible, accused Mr Forbes of "playing the blame game."
There were 50,000 responses to a council consultation on the proposals.
Newcastle council, like others across Britain, is facing a financial crisis through the axing of government funding.
Across Britain campaigners are demanding that the Labour-run councils in Britain's biggest cities defy the government and introduce budgets based on people's needs, not central government diktats. So far none has dared to do so.
Birmingham and Leeds recently voted through budgets which will see services disappear.