THE leader of Worcester City Council has told the Swan Theatre that it must face financial reality.

Councillor Stephen Inman, who has spoken to the theatre, said the council was willing to continue its basic annual grant of £54,000, but said the Guildhall was facing its own financial difficulties and could not sustain the level of funding the theatre had received in recent years.

Four years ago, the council came to the rescue of the Swan and agreed to increase the grant by £83,000 to £137,000 for three years.

An extra year at this level was agreed last year and the grant was matched by West Midlands Arts.

But last month, the council revealed that is was facing a potential £1.1m deficit next year unless it made cuts to the budget.

"The city council has generously supported the Swan Theatre over many years in the face of mounting costs.

"But this request for even more public subsidy is not sustainable," said Coun Inman.

"In view of the need to make significant cuts to our own budget it is impossible to provide the extra financial support the theatre says it needs."

"I understand that, unless we are able to fund the theatre at three times the basic grant figure, the Swan can't survive.

"This is regrettable but, like the council, the Swan has to face financial reality," he added.

Coun Adrian Gregson, leader of the Labour group, said it was outrageous to cut the theatre's grant.

"The council should provide sensible and rational support for the arts. We have supported it for many years and the suggestion that it is going to close is quite unthinkable," he said.

Worcester MP Mike Foster said the city council would be sounding the death knell for the theatre by cutting the grant.

"It looks at this moment that this is the end of the Swan in Worcester and that is a tragedy.

"There will be thousands of people who will have many happy memories of productions there.

"When city councils have a budget crisis this is the real impact - the loss of valued services," he said.

West Midlands Arts were unavailable for comment at the time of going to press.