A major plan for a new landmark 500-seat theatre has been scrapped in favour of a much smaller venue because the budget is millions of pounds short.

Worcester City Council has revealed it is pulling the plug on plans to turn the listed Scala Theatre in Angel Place in Worcester into a 500-seat venue and will instead be building a 300-seat venue after seeing the gap in the budget rocket to £3.5 million since the start of the year.

The council has blamed inflation and rising construction costs for the spiralling budget.

READ MORE: Council moves ahead with Scala plans in Worcester despite budget woes

The project, which was being funded by nearly £18 million in government Future High Street Fund money, has been drastically reduced ever since the money was awarded in 2020 and now the city council is even battling to carry out the cornerstone Scala work.

Worcester News: VISION: An artist's impression of the regenerated Scala Theatre in Worcester

The new plans would see a ‘flexible’ 300-seat venue built instead of a theatre with 500 fixed seats.

READ MORE: Considerations over scrapping Scala Theatre as costs soar

Plans for a flexible stage which could be reconfigured for every performance, taller rooms, and balconies have also been ditched in a bid to cut down costs.

On top of all that, the council still has concerns that even if the new theatre is built, there would not be enough money to run it.

A report, which will be discussed by the policy and resources committee at a meeting on July 25, said the theatre plans in their current state would be “financially unviable” without “significant” backing from the council every year – which it cannot afford.

The council and Worcester Theatres, which is currently set to run the Scala, have yet to find any outside funding to build or run the theatre.

READ MORE: 'Serious concerns' over spiralling cost of new theatre

If the theatre project was scrapped completely, the council would have to return at least £10 million of the £18 million it was awarded two and a half years ago.

The city council was awarded nearly £18 million from the government in December 2020 to help transform and re-open the listed Scala Theatre alongside a hefty list of improvements to Angel Street and Angel Place.

That work included buying and revamping the former Co-op supermarket and Panama Jacks restaurant in Angel Street and turning nearby Trinity House into apartments.

READ MORE: New multi-million-pound Scala Theatre in Worcester may be ‘unusable’

The entire project has been gradually scaled down from what it looked like in 2020 with the council eventually scrapping its plans for the crumbling Co-op, Panama Jacks and Trinity House.

The council had originally intended to convert the supermarket, which has been empty since 2016, into a new food hall and then looked to use part of the building as ‘back of house’ facilities for the new Scala Theatre but even that was scrapped over budget woes.

Last year, the council redrew plans for the new 500-seat venue and ditched another key piece of the project - to convert the neighbouring grade II-listed Corn Exchange into a 110-seat venue, dance studio and rehearsal space – to move money towards re-opening the Scala.

Councillors then moved ahead with submitting a planning application for the 500-seat venue despite reports that the budget was already £1.5 million short.