Goronwy Jones, head teacher of Baden Powell Primary School, said he would lose two part-time teachers from April.
"It is a double tragedy," he added, "both for the individuals concerned, who will have no job and income at very short notice, and for the children and class teachers here."
A spokesman for Cardiff National Union of Teachers said: "Teachers don't talk about asylum children as a problem but say how much they enrich school life."
Cardiff Council said funding from the Welsh Assembly had enabled it to provide the equivalent of 17 teaching posts. Changes to the way the support is calculated for 2004/5 mean that available funding has been reduced by almost 50 per cent, forcing it to review its arrangements.
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