Sotherton, who won bronze during the 2004 heptathlon in Athens, was targeting a 400m place in London but has lost her second-tier "podium relay" funding.
Doubts have now emerged whether the 34-year-old will compete at the Games.
Sprinter Lewis-Francis has dropped from top-level "podium" funding to podium relay.
The 29-year-old was part of the men's 4x100m team that claimed a goal medal at the Games in Athens seven years ago.
"We operate in a results-driven business in which clear decisions have to be made if athletes are not performing to the high standards we set," said UK head coach Charles van Commenee.
"We have reviewed performances from 2011, including those from previous years, and identified what needs to be done in order to meet our targets for 2012."
Podium level funding is given to those athletes that are expected to challenge for medals at Olympic Games.