I think the arts are at hugely positive stage

Peter Hewitt

Peter Hewitt, chief executive of the council, told BBC News Online that the extra money should energise the arts.

He said: "It should make a huge difference. It provides us with an opportunity to give very significant increases to many organisations across the country.

"Some 200 companies will benefit and the average increase in funding is 17% and some are getting two or three times their previous grants."

'Best news'

The Arts Council has long been a convenient political football, attacked by politicians for spending public money on what are perceived to be unworthy projects, and attacked by artists for not levering enough money out of the government.

There is no doubt whatsoever that the arts in this country are hugely underresourced in overall terms

Peter Hewitt

But the combination of internal reform and the allocation of extra money could go a long way to reforming its own image.

The council described the extra funding as "the best news for the arts for a decade" and there is a real sense of achievement within the corridors of the council, a stone's throw from the Houses of Parliament.

The Arts Council can face its sternest critics and point at a thriving arts industry as evidence of its success.

"I think the arts are at hugely positive stage," said Mr Hewitt.

"I genuinely believe in the arts there is a real buzz and a recognition in the public at large that the arts are important.

"The fact we have got this new money and given huge increases to theatre - an artform some people said was dying a year or so ago - there is no doubt there is some real energy coming through in theatre and our money will help in that."

Critics

But the Arts Council has its critics, and not just within the arts community.

I think a lot of people for some time have thought that the arts council perhaps does need to change

Peter Hewitt

Both the Conservatives and the Liberal Democrats would radically re-structure the body if they took power.

In fact, the Conservatives would go so far as to scrap the body, believing the arts need to be handed "back to the people".

To head off much of this criticism, the Arts Council has started to take steps to re-organise from within.

The council will merge with its 10 Regional Arts Board to create a single body.

But Mr Hewitt rejects accusations that this would force a centralisation of power.

Effective body'

He said: "I think a lot of people for some time have thought that the arts council perhaps does need to change.

"What we are about here is creating an organisation which can operate as one effective body on behalf of everybody in this country," said Mr Hewitt.

Culture Secretary Chris Smith secured the extra cash

"We are intent on getting more resources down to regional level, giving regions more responsibility than they have had in the past. We also want to have a very strong and intelligent and connected centre."

Despite the extra funds the Arts Council believes it has a long way to go before they are happy with the level of funding.

Mr Hewitt said: "There is no doubt whatsoever that the arts in this country are hugely underresourced in overall terms.

"This is a very important contribution that government has made... but there is a further stage to go."