The attraction index of the Hong Kong Open continues to plummet, with beleaguered organisers poised to cut the prize money drastically - by US$700,000 - for this year's tournament, which is still struggling to attract a title sponsor. Another round of belt-tightening will reduce prize money for the December 5-8 showpiece at the Hong Kong Golf Club to US$1.3 million, according to an informed source. This will be the second hefty cut in successive years, resulting in the purse shrinking by more than 100 per cent from a high of US$2.75 million in 2011. Last year, US$2 million was on offer. The European Tour, which co-sanctions Hong Kong's oldest professional sporting event with the Asian Tour, refused to confirm the prize fund will be slashed, but it is understood the failure to sign up a title sponsor to replace UBS has forced organisers to take this drastic measure. The tournament has also yet to get financial backing from the government's Mega Events Fund, which over the past two years has pumped in HK$23 million - HK$15 million last year and HK$8 million in 2011. "Prize-fund details remain unconfirmed but we hope to be able to announce a figure in the next couple of days," said European Tour spokeswoman Vicky Jones. "What we can confirm is the tournament will take place from December 5-8 as planned and we are continuing to work towards securing a title sponsor for this year as well as future editions. "As for Mega Event funding , an announcement will be made by the MEF secretariat in due course," Jones said. The reduction in prize money is one more nail in the coffin for the open, which is under severe pressure to attract marquee names to Fanling this year. The tournament will clash with a number of high-end events including the US$6.5 million Nedbank Golf Challenge in South Africa, Tigers Woods' World Challenge in the US and the US$2 million OneAsia Championship in Dongguan. The European Tour had admitted earlier the competition could affect the field in Hong Kong, and the reduction in prize money will not help. And this year's tournament will not be part of this season's "Race to Dubai", after Hong Kong lost its coveted spot as the penultimate leg in the European Tour's Order of Merit to the US$7 million Turkish Airlines Open. Hong Kong Golf Association officials were unavailable for comment while the body waits for its new chief executive, Tom Phillips, to take over the role from Iain Valentine, in two weeks. To add to all the tournament's woes, the Hong Kong Golf Club is also in the crosshairs following moves by lawmakers asking the government to develop the 176-hectare Fanling site for housing instead of razing existing villages in the New Territories. The Hong Kong Golf Club finally issued a statement this week, saying the Fanling course was vital to the continued existence of the Hong Kong Open. "Apart from the Macau Grand Prix, the Hong Kong Open is the only world-class sporting event with a history of more than half a century in the region, and is one of the few world-class sports events held annually in Hong Kong at the same venue," it said. That world-class tag is now under threat.