The unit supports the work of the 10 family drug and alcohol courts (FDACs), which bring the judiciary and multi-agency services together to help substance-misusing parents involved in care proceedings to quit their addiction and keep their family together.
The FDAC National Unit is run by the children's charity Coram and Tavistock and Portman NHS Trust. It supports the expansion of FDACs, evaluates their work and provides training as well as helping to coordinate their work on a national level.
It is feared that if it closes, there could be a loss of focus on national efforts to establish FDACs more widely across the country.
The unit has relied on Department for Education innovation funding since 2015 but this money runs out in September and a new source of income has yet to found.
It had been hoped that the unit, which costs around £250,000 a year to run, would be able to ensure its future through a social impact bond (SIB). However, the SIB plan has now fallen through.
"It has always been difficult to fund the unit, despite the value it adds, due to a lack of multi-agency and cross-government funding options," said Steve Bambrough, director of the FDAC National Unit.
"We had hoped the SIB model would help address this, but unfortunately due to a combination of factors this has not worked out."
With time running out, supporters of FDACs will be holding an emergency meeting in the House of Lords this Wednesday to raise awareness of the unit's plight among parliamentarians. The meeting is being supported by former children's minister Tim Loughton and Labour MP Emma Lewell-Buck, the shadow children's minister.
"There will be a loss of central focus without the national unit," said Richard White, secretary of the child protection charity the Michael Sieff Foundation, which is backing the campaign to save the unit.
"The danger is each court will go into its own silo. There also will be a loss of the ability to train people about the FDAC, particularly the judiciary, and there won't be research as you cannot imagine local FDACs doing that."
Since their launch in 2008, a number of studies have reported that FDACs are effective at keeping families together and saving money.
A Brunel University evaluation of FDACs reported that mothers and fathers who go through the FDAC process are more likely to quit drugs and alcohol before care proceedings finish.
The same study said more than a third of mothers whose case was handled by a FDAC were reunited with their children at the end of the proceedings compared to just 19 per cent under standard care proceedings.
FDACs are thought to save money by reducing the number of children taken into care, cutting the amount the NHS spends on drug and alcohol treatments for parents, and lowering the number of families who end up in care proceedings repeatedly.
There are currently 10 FDACs operating around the country including in London, Northern Ireland, Leeds and East Sussex.