Kingston council announced it will strip the Rose Theatre of its £265,000 annual funding by 2022 and will not replace a £147,000 bursary, which it paid the final instalment of this year.
In a letter to councillors and stakeholders, the theatre’s chairman Chris Foy wrote that the “desire to deny the Rose any financial support by 2022 creates a risk to its sustainability”.
He said: “You have no idea how damaging your plans will be, to the theatre and to all those who benefit from the support you provide.”
Mr Foy, the former managing director of the Royal Shakespeare Company, added: “The Rose is a charity. It is not a commercial theatre.
“It has always depended for its existence on a combination of ticket sales, fundraising and financial support from the council and Kingston University.”
In 2015, the previous Conservative administration wrote off £1.7 million of debt owed by the Kingston Theatre Trust, which runs the Rose, and reduced the rent from £150,000 per year to £35,000.
But the trust has been criticised for its “uncommercial” programme of events and without the council’s investment the theatre would have reported a loss every year since it opened in 2008.
Lib-Dem council leader Liz Green said: “We think they can act more commercially and become more efficient in the way they are run. No one is denying it is an asset. We want to work with them to look at how they use it.
“We face having to make savings and simply can’t afford to spend more than a quarter of a million each year on this. We have always said the theatre should be self-sustaining in the long term.”
However, Mr Foy made it clear there could be no substitute for council funding. He said: “There is no simple model by means of which income from ticket sales or fundraising could simply be ‘turned up’, or the costs ‘turned down’ to compensate for the withdrawal of council support. If there were, we would have done it already.”