The letter to David Willetts from Vicky Randall, professor emeritus at the University of Essex and chair of the PSA, says research funders should be given "maximum freedom" to decide what work is funded and how much it is given.
"We regret the decision of research councils in the arts, humanities and social sciences, evidently consequent upon considerable pressure from the Department for Business, Innovation and Skills, to discontinue the awarding of small research grants," it says.
"These response-mode awards have traditionally played a vital and inexpensive role in fostering innovative research."
Both the Economic and Social Research Council and the British Academy have recently announced the end of their small grants schemes, while a number of small grants programmes run by the Arts and Humanities Research Council have also been halted.
In an article for Times Higher Education last month, the British Academy's president, Sir Adam Roberts, blamed government "reservations" for the decline of his organisation's small grants scheme - although he said he did not regard it "improper" for the government "to decide which types of research scheme it wishes to fund".
Professor Randall told THE that the letter to Mr Willetts had been sparked by the controversy over references to the "Big Society" in the AHRC Delivery Plan, which critics claimed were included at the government's behest.
"We have received requests to sign various petitions, but we didn't feel we could do that because (the allegations) hadn't been proved," she said. "But it prompted us to feel we should make some quite strong statement about the general direction things are going."
She said that the Haldane principle had always been "less clear-cut than it is depicted" and that there was always "oscillation between government direction and autonomy for the research community". But, she added: "At the moment the pendulum is swinging very much in a restrictive direction."
The letter also criticises the "ban" placed on the discussion of "politically sensitive" research findings in the run-up to elections in 2009 and 2010.
"If political science is to make the most effective contribution it can to the public good, it needs to be able to get on with its own activities without too much ideological and micro-interference," Professor Randall said.