Football Association general secretary Alex Horne insists reversing a drop in participation is a "top priority" after the sport was warned that part of its public funding is at risk.
Football and tennis were among the worst-performing in Sport England's latest Active People Survey, which found overall that participation had recovered to the level of October 2012 of 15.5million after a slump in April.
There was good and bad news in the figures with swimming, cycling and athletics/running all putting on numbers but a worrying decline among 16 to 25-year-olds.
Football is now the fourth sport in terms of participation, while Sport England said tennis has failed to capitalise on Andy Murray's success at Wimbledon.
Football's numbers are down to 1.83million, a drop of 100,000 since April, and more than 4% down on the 2005 figure.
Horne said: "These are clearly disappointing numbers. Understanding and reversing the fall in participation is an immediate and top priority and we are working exhaustively with Sport England and our other partners to ensure the right plans and programmes are in place to achieve this.
"What is clear is that the nature of football participation is changing and that our players increasingly want football on their terms; less formal, less frequent, more flexible."
Sport England will now hold meetings with the governing bodies of football and tennis and will make a decision in January as to whether up to 20 per cent of their funding will be suspended. Football's 2013-17 funding award was Â£30million.
Sport England chief executive Jenni Price told Press Association Sport: "We operate a payment for results scheme so football are definitely in the at-risk zone.
"The FA has the power to do an enormous amount of good for grassroots football as they have a lot of sponsorship, a lot of power and connections, but they need to focus and work much more effectively. They have to think big in their participation programmes."