Eastbourne's oldest theatre could be sold off as part of a council entertainment shake-up.

The borough council is considering disposing of the Royal Hippodrome after a review into the cost effectiveness of its four theatres.

A report to councillors says the town has too many theatre seats for its size and population.

The council wants to consolidate its facilities in a "cultural quarter" in the Devonshire Park area.

The Royal Hippodrome, which was built in 1883, is located in the town centre and does not fit in with the plan.

The report, to be considered by the leisure scrutiny committee on Monday, recommends the council terminates its ten-year lease of the theatre to commercial management company Matpro Productions, which is not due to expire until 2007.

It says: "It is recommended that steps be taken to terminate the lease of the Hippodrome and to establish alternative uses for the land or the building."

At present the Hippodrome is one of the few town theatres making a profit and closing it and terminating the lease would cost the council £12,350 a year.

Despite its popularity, the report's authors consider the Hippodrome should be closed in the hope of boosting audiences at Eastbourne's other, less successful theatres.

It says: "The Royal Hippodrome Theatre programme is crowding an already over-supplied theatre market. It is difficult to see how it can continue to present a professional summer show without having a negative impact on audiences for the Devonshire Park theatres."

The 600-seat theatre specialises in variety entertainment during the summer season from March to October, aimed mainly at holidaymakers.

By closing it, the council could save £400,000 in building work which needs to be carried out.

Extensive internal renovations have been carried out at the Royal Hippodrome in the last decade, led by the Eastbourne Hippodrome Theatre Company and Royal Hippodrome Friends.

Pamela Kuhn, of the Friends, said: "I am a bit horrified by this news though I have heard rumours.

"It is the only theatre in town which makes any money and a lot of the people who go there would not go to the others because they are too far away from the hotels.

"Inside it is a Victorian gem and a lot of restoration work has been carried out on it. I don't understand why it would have to close."

Coun Barbara Goodall, council leisure spokeswoman, said: "Closing the Hippodrome is an option. If we have to close a theatre it is very sad. It is a decision I do not relish making."