London Mayor Boris Johnson has warned against cutting the capital's arts funding after a group of MPs asked Arts Council England to shift some spending from London to the regions.
A new House of Commons Culture, Media and Sport select committee report said there was a "clear funding imbalance".
The Arts Council should "restore some balance" across the country, it added.
But Mr Johnson said cutting funding to London would be "an act of sabotage for one of our country's greatest assets".
Arts Council England distributes more than £600m of taxpayers' and Lottery money to galleries, theatres and other cultural organisations per year.
Last year, a separate report said arts funding from central government amounted to £69 per head in London and £4.60 elsewhere in England.
"London has long received a disproportionate share of arts funding, something which even the Arts Council acknowledges," the select committee said.
"To a limited extent this reflects London's position as the capital city and a world cultural centre.
"However, there remains a clear funding imbalance in favour of London at the expense of taxpayers and lottery players in other parts of the country.
"The Arts Council is well-placed to restore some balance. It must do so with greater urgency if it is to realise its declared ambition to engineer the provision of great art and culture for everyone."
But Mr Johnson responded by saying the committee's report was based on "spurious calculations and a partial consideration of how the arts are funded".
"The report represents a lost opportunity, reigniting the overly simplistic London vs the Regions debate around arts funding," he said.
"London is one of the great world cities for culture, attracting visitors in the millions which helps generate billions the economy of the whole country.
"Sacrificing this particular golden goose for a bit of glib London-bashing will do little to improve cultural provision in the regions and would be an act of sabotage for one of our country's greatest assets."
by BBC Arts editor Will Gompertz
The argument about London getting more than its fair share of the subsidy pie in England has been rumbling on for decades and will probably continue as long as the state continues to fund the arts. Which it should, according to the Select Committee report that stated, "we would be disappointed if the Arts Council saw any further fall in its grant-in-aid".
I sense a change in attitude among politicians across the spectrum. Where once the arts were viewed as a nice to have sideshow of no great consequence, they are now being seen as the engine powering the country's burgeoning creative industries (one of the fastest growing sectors of the economy), as well as a reliable investment for urban regeneration - from Turner Contemporary in Margate to The Sage in Gateshead - and a force for social cohesion.
I don't think that will mean more money for the arts across the board any time soon, but I do suspect the rhetoric towards the arts will become more positive.
In his response to the report, Arts Council England chairman Sir Peter Bazalgette said he was pleased the committee "has acknowledged that we are tackling" the imbalance.
The government's grant to the Arts Council has dropped by 33% since 2010.
Sir Peter welcomed the committee's suggestion that any future increase in the government grant should be spent outside the M25.
"We share the committee's desire for a speedy response to the historic challenges to rebalancing," he said.
"It is difficult to act urgently when our income is shrinking and additional resource would certainly allow for greater flexibility in supporting our ambition to achieve this."
ARTS COUNCIL ENGLAND FUNDING 2013/14
The disparity in funding between London and the rest of England was highlighted in a report by arts industry analysts David Powell, Peter Stark and Christopher Gordon in their Rebalancing Our Cultural Capital report in 2013.
The select committee supported the trio's suggestion that Lottery funding, rather than government grant-in-aid, should be adjusted to achieve a fairer spread.
"We believe this could be achieved in a timely fashion without threatening London's world status as a cultural centre," the MPs' report said.
It continued: "We believe the pace of change should be much faster than it has hitherto been."
Elsewhere in the report, the MPs expressed concerns about the prospects for further cuts to local council arts budgets and said they were "staggered" by culture minister Ed Vaizey's admission that he could not recall a single conversation with any local authority.
Shadow culture secretary Harriet Harman said the government was not "walking the walk" when it came to supporting the regions.
"The report highlights the government's ignorance of the key role of local authorities in supporting arts and culture and shows that DCMS ministers are not engaging with local councils," she said.
"There is a real imbalance in arts funding between London and the regions and this is made worse because arts philanthropy is scarce outside the capital."
Northern Ireland, Wales and Scotland have their own arts funding arrangements.
CASE STUDY - Salisbury Playhouse
The 517-seat Salisbury Playhouse theatre enjoyed success earlier this year with Worst Wedding Ever, a new play by Broadchurch creator Chris Chibnall.
The theatre gets £844,000 a year from Arts Council England - down 6% in cash terms on 2010, typical of the cuts experienced by many theatres.
The venue is "lucky" that Wiltshire Council has kept its annual grant at £155,000, executive director Sebastian Warrack says - in contrast to nearby Somerset, which cut its entire arts budget in 2010.
The Playhouse has had some success attracting private sponsorship and philanthropy, Mr Warrack says. But he continues: "It's always a challenge and arts organisations have greater visibility in London and there are more potential corporate sponsors in London, so they have a bigger pool. We have a relatively small pool to draw on."
To make up for the Arts Council cut, he says the theatre has made efficiency savings and is co-producing more shows with other theatres.
"We work with other organisations more than we did in the past," he says. "It's about working in different ways."