The Theatre Trust says that while some venues, such as Scarborough's Stephen Joseph Theatre, may have been saved by lottery funds, others such as the Hackney Empire in London have been set back because they were encouraged to go ahead with over-ambitious plans.

Trust Chairman Sir John Drummond has urged the government to implement a 10-year strategic plan to restore and renew venues across the country.

The report, Encore: Strategies For Theatre Renewal, examines the development of 14 theatres including the Stephen Joseph and the Empire.

Larger schemes could fail

"It is significant that nearly all of the stories told here pre-date the National Lottery, and that where the influence of the lottery has been felt. It has not always been beneficial," Sir John said.

Capital funding: Ken Livingstone and Lord Archer at the Hackney Empire

Millions of pounds became available in the early years of the lottery, backing major schemes such as Sadler's Wells and the Royal Opera House in London and the Baltic Flour Mill in Gateshead.

But the trust argues that some of the large schemes which were approved quickly may turn out to be failures, while smaller, more promising projects in needy areas were ignored.

A spokesman said: "Anybody who already had a proposal in the bottom drawer was at the head of the queue and they just had to fill in the a form ticking the right boxes to get the money.

"None of these boxes asked whether the scheme was actually a good idea."

Less money available now

Now there is less lottery money available for the arts, and in England the Arts Council is drawing up plans for a new funding programme under new Chairman, Gerry Robinson.

The Hackney Empire is one venue which recently submitted ambitious proposals - but it was turned down by the Arts Council's new regime on the grounds that its plans were too expensive.

Sir John said: "What is needed is a reliable and continued source of both capital and revenue funding for the arts, which enables to people to plan ahead.