Much of the £300m destined for sexual health services is not reaching the frontline, a survey has suggested.
Cases of chlamydia increased last year
The report by the Independent Advisory Group on Sexual Health and HIV found much of the money has been used to cover local NHS debts.
The government has made the improvement of sexual health a priority for the NHS in England.
The Department of Health said local health trusts were responsible for sexual health services.
Figures published last month showed the number of sexually transmitted infections (STIs) rose by 3% to 790,387 from 2004 to 2005.
The biggest rise was seen in cases of syphilis, which rocketed by 23% to 2,807, but chlamydia, genital warts and herpes also registered increases
The government had pledged to make sexual health one of the top six priorities for the NHS in England in 2006/07.
But a survey by the IAG, which advises the government, found funding has reached sexual health services in just 30 out of 191 primary care trusts (PCTs).
There are 304 trusts across England.
The survey found 51 PCTs said they had absorbed their entire allocation into their general budget, while 33 had withheld some or most of the funding.
Forty PCTs said allocated funding had not reached contraceptive services, and that genito-urinary medicine (GUM) services were being affected by funding issues, resulting in recruitment freezing and understaffing.
And 31 said they had withheld funding from their chlamydia screening programme.
IAG chair Baroness Gould said: "Better sexual health services bring benefits for patients as well as delivering cost savings for the NHS by reducing the number of STIs and unwanted pregnancies."
She said local health trusts were facing "difficult financial circumstances".
But she added: "Reports coming back to us indicate that sexual health services are still facing difficulties in many areas."
Nick Partridge, chief executive of the Terrence Higgins Trust, said local trusts would have to be "innovative" to find ways of addressing sexual health needs while tackling their deficits.
But he added: "It would be a great disappointment if the nation's sexual health were sacrificed on the altar of financial balance in the NHS."
A Department of Health spokesperson said: "PCTs are responsible for meeting the sexual health needs of their local populations, measured against clear government targets.
"We have provided PCTs with more sexual health funding than ever before, but it is up to local NHS organisations to decide how to manage their budgets to deliver services to best meet local needs - what really matters is the outcomes."
"We have made it clear that all PCTs must take action in these areas."
But Dr Mike Dixon, chairman of the NHS Alliance, which represents primary care, said: "I fear that some PCTs are using the money for deficits. And there may be a bit of creative accounting when assessing priorities."
He said the move to practice-based commissioning, where GPs will control their own budgets, will mean services can be redesigned which should mean services improve.
Penny Barber, chief executive of the Brook advisory clinic in Birmingham, confirmed the latest funding had not yet reached her organisation.
But she indicated grants are often made at a later stage of the financial year.
"Let's hope that by highlighting this problem in reports like this and putting the case again for sexual health... that some of the money will be directed to services needed," she told BBC Radio 4's Today programme.
She added: "We are very worried that by stalling or halting some of this funding the good work that has been done so far won't be sustained and there will be dire consequences."
Shadow Health Minister Andrew Murrison said: "It is vital that funding earmarked for public health is not used to offset the government's financial mismanagement in other parts of the NHS."