Parentline, a Canberra organisation that was supposed to link parents and carers with programs and counselling, had its ACT government contract terminated on Tuesday, and issued a statement early on Wednesday describing the government's decision as a “devastating blow.”

But Parentline had been warned by the Community Services Directorate that services were complaining about not receiving the referrals they expected under the terms of the $800,000 contract.

Parentline's Samantha Page in her statement called the decision a “black day” for community services and for 15 Parentline staff.

“The notice to terminate the contract gave just 4 hours to shut the service down, cutting short negotiations begun in good faith to resolve the matters in dispute,” the statement said.

“It is a devastating blow but we are doing everything in our power to retain Parentline's capacity to deliver important support to families, children and young people across the ACT.”

But Maureen Sheehan of the Community Services Directorate said her department made numerous attempts to help the organisation to do the job for which it had been contracted.

"We offered to send our staff out there to work alongside Parentline every day to set up that new important service,” Ms Sheehan told ABC radio on Tuesday.

“Unfortunately Parentline refused our offers of assistance and then, as the problems with the service became apparent, we offered again that staff go out and work with Parentline.

"Again, unfortunately, Parentline did not accept our offers of assistance."