Oxford Homeless Pathways said 200 beds at the O'Hanlon House hostel in the city centre were at risk from a planned £600,000 cut in its council grant.
Oxfordshire County Council has proposed a £1.5m cut to its budget for homelessness services.
The authority said it was not obliged to provide homelessness services, but no decision had yet been made.
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A spokesman said it was "not a legal requirement for the county council" to offer facilities.
The charity's chief executive, Lesley Dewhurst, said if the cut goes ahead it would have "a devastating impact" on the services offered by her organisation and others.
"You can't do those services for nothing, you can't just do them with volunteers, you can't do them without there being bricks and mortar to accommodate them in," she said.
"Losing that amount of money will mean organisations, potentially like mine, closing.
"I can't believe, after my organisation has been going for 30 years, we will suddenly go back to a situation that is almost pre-George Orwell [era], where there are endless numbers of people living in effectively shanty towns in tents."
Orwell wrote Down and Out in Paris and London as a memoir of life among the poor and destitute in the late 1920s.
The county council's spokesman said it was already having to save £290m from 2010 to 2018, and may have to save up to £50m on top of that.
He added 50% of the council's overall budget was spent on the 2% of the population who are in care, and it was believed this could rise to 75% by 2020.
Homeless people in Oxford could end up living in "shanty towns" because of council cuts, a charity has warned.