Dance theatre production Knots was described by The Argus critic as "brave and exciting"; Meeting Joe Strummer scooped an Edinburgh Fringe First award; the "immensely slick" Hysteria was one of the winners of last year's Argus Angel awards.

Acclaimed though they were, shows like this will not feature on Komedia's next programme. The Gardner Street arts venue - one of Brighton's best known - lost out on a £150,000 Arts Council grant and, as a result, has announced a reluctant move away from producing theatre, dance and local talent towards a "harder, more commercial approach".

Coming after the loss of the University of Sussex's Gardner Arts Centre less than 12 months ago, Komedia manager Tim Hawkins believes theatre and dance production in the city is being "decimated".

The Arts Council contributed towards Komedia's recent £450,000 redevelopment, which included a new upstairs theatre space where the venue pledged to continue to promote new work.

But the Council was concerned at the lack of theatre being shown at Komedia (the current programme, indeed, lists no dramatic productions) and felt the money could be better used to achieve its objectives by the region's dance and theatre companies.

Tim says he found the decision hard to understand.

Komedia's three-year grant, which ends in April, accounted for six per cent of the venue's revenue and allowed it to put on work that commercially-run enterprises could not risk.

These included shows like Russian dance theatre group Derevo's Ketzal, described by The Guardian as one of the "most genuinely astonishing things you're ever likely to see".

Tim says: "They may be putting money into theatre, but where are people going to see it?

"We've invested lots of our own money into building a venue with a big theatre, which they also helped to pay for, but now they won't help us fund shows to put in it.

"It's not that we don't have audiences for this stuff Ð we do. These shows tend to sell out, but they are very expensive to produce Ð around £2,000 or £3,000 Ð for a venue that only holds 200 people."

Komedia's assistant general manager Jackie Alexander says the venue had not been able to put on much theatre in the first two years of funding because redevelopment was taking place.

But over the past 12 months, Komedia had shown "a huge amount" of international and UK theatre, she says, including Japanese mime artists Gamarjobat and Brighton-based Prodigal Theatre's Queen Of The Slaughter Ð both hits at last year's Brighton Fringe.

Brighton Fringe manager Nick Stockman says: "Komedia has said losing this funding means it will not be able to put on its "dangerous" drama Ð the sort of shows that don't necessarily make much money but are pushing the boundaries of theatre.

"They put on a great programme at last year's Fringe and if we lose that Ð and it seems inevitable that we will Ð then that's a great shame, not just for the Fringe but for people in Brighton who won't be able to see these shows."

Komedia has said the cuts could also have a knock-on effect on local groups who use the venue, either through an increase in rent, or, ultimately, by their productions being dropped in favour of more lucrative events.

Sally Abbott, the Arts Council's director of arts, believes Komedia is better known for its cabaret, music and comedy than its theatre and says the Council had ongoing concerns that it was not "artistically innovative" enough.

She denied that by withdrawing funding the Council was stifling platforms for new theatre in the city.

This year, grants have gone to the Brighton Dome and Festival, choreographer Hofesh Shechter's dance company and New Writing South, all based in Brighton. Ms Abbott says: "We are investing new funds into theatre and dance organisations, rather than the kind of mixed venue that Komedia is."

She adds that there are other methods of funding open to venues, including applying for individual project grants.

Zap Arts - which ran the popular Streets of Brighton event - also learned its three-year grant would not be renewed.

While disappointed at the Art Council's decision, founder Dave Reeves says he wholeheartedly agrees with it.

"The more opportunities there are for artists and audiences to see work the better, but you have to be realistic," he says.

"If you have only got a finite amount of money to work with, you have to make changes."

The 38-year-old Gardner Arts Centre, in Falmer, fell victim to funding issues and was forced to shut last March.

Its management needed £6m to pay for repairs to the Grade-II listed buildings in order to secure Arts Council grants, but funding from Brighton and Hove City Council had been withdrawn and the centre could not compete with increased competition in the city.

Sue Webster, the Gardner Arts Centre's former director, says: "The Gardner worked with Komedia very closely and promoted the same sort of work, albeit on different scales.

"It's a bit like the Paris fashion shows for theatre, in that it allows people to see new theatre and work that they wouldn't normally see Ð and that feeds into the theatrical community of the city.

"It would be very unfortunate if this means that sort of thing cannot be seen in Brighton."

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