Moray Council's move to cut the arts grant will save £62,000 for the rest of this year, and £94,000 in 2013/14, but brought a backlash from writers, artists, musicians and the local MSP.
The Scottish Government urged the local authority, which is run by a Conservative and Independent coalition and is trying to save £30 million a year, to reassess the decision.
A spokesman said: "The Scottish Government views and values culture and the arts as of key importance to Scotland.