Cutting too many calories puts your body in a state of alarm, in which it pushes to conserve calories rather than burn them. You start feeling cold and tired, and the lack of energy forces your body to break down muscle tissue to fuel its vital operations. This is bad in more than just one sense, since the amount of muscle tissue is directly related to metabolism, the rate at which you burn calories.
You do need to slash calories to lose weight, but you should not go too far. As a general rule, do not cut more than 500 calories, because then you start experiencing two effects that are not helpful in dieting at all. First, your body decreases the fire in the oven from steaming hot to a mild simmer. And second, it starts breaking down muscle tissue, which in return reduces the burn rate even further.
There are two ways of dealing with this problem. The first and simple one is to make sure that the calories you cut do not come from protein. Digestion of protein triggers new fires in your stomach, and those calories will not leave a lasting impression on the weight scale. The slightly tougher way to step up the metabolism is to step up your exercise. Exercise increases your energy output, calling on stored calories for extra fuel. Recent studies show that not only does exercise increase metabolism during a workout, but it also causes your metabolism to stay increased for a period of time after exercising, allowing you to burn more calories.
source : http://reviewsonnaturalsupplements.blogspot.com/2008/05/how-to-keep-your-metabolism-from.html