Seven of Scotland's leading playwrights have written to Creative Scotland to express "extreme concern" over its controversial funding changes, which they fear is a "catastrophic error of judgement".

The joint letter is from Peter Arnott, Ian Brown, David Greig, David Harrower, Zinnie Harris, Linda McLean and Douglas Maxwell – some of the most acclaimed writers in Scotland. It urges the body, which unveiled its funding revamp two weeks ago, to work with Scottish artists to create a new funding strategy "in which all have trust and that will more effectively contribute to the flourishing of Scotland's art and culture for the future".

The funding changes will see 49 major arts companies move from multi-year "flexible" funding to project funding from next year.

These companies, the writers say, are "the living heart of Scottish culture".

The letter, addressed to Sir Sandy Crombie, chairman of Creative Scotland, says: "We are extremely concerned that insecurity and misdirected management energies will arise from the system so far announced, rather than the proper administration of scarce resources.

"Project funding is a state of constant uncertainty.

"Under that system, artists and producers can't plan ahead. It is a kind of limbo which may, just, be a defensible testing ground for young companies, but it is utterly unsuited to the flourishing of established artists and mature organisations."

Andrew Dixon, chief executive of Creative Scotland, has said the changes are "not about cuts" and has noted the large increases in National Lottery funds that are now available to arts companies.

Earlier this week, Culture Secretary Fiona Hyslop reminded Scottish artists that more savage cuts had been felt by companies in England.