An emergency National Lottery grant prevented the English National Opera (ENO) from going into receivership, its chairman has admitted.

Martin Smith said the �4.2m cash injection from the Arts Council of England saved the prestigious company from going under after it fell into financial difficulties.

The ENO was bailed out by a grant as it prepared to cut the number of choristers from 40 to 60 in a bid to slash its wage bill.

Mr Smith admitted that some of the money would be used to fund redundancies but said no decision had been made on the number of job cuts facing the company.

A number of administrative positions were expected to be axed as the company tries to secure its financial future.

Box office receipts have not been as promising as expected

"For some time the ENO has been chronically sick. The company would have died last week had the Arts Council not intervened," he said.

"The company was in such serious financial difficulty, it was clear that our only hope of saving it was to seek a new injection of funds from the Arts Council.

"Without this support, this company would have gone into receivership last week."

Artistic heart

He said cost-cutting was now essential but said there would now be "fewer but more secure jobs".

But the performers' union Equity said Mr Smith's comments did nothing to allay the fears of the chorus.

A spokesman said the proposed redundancies would "rip out the artistic heart of the company".

The ENO's deficit was running at �2m before the grant was awarded, and was expected to rise by 2004.

The crisis is blamed on too high expectations of box office receipts and the effects of the 11 September attacks.

In 1997 the Arts Council gave the ENO a �9.2m grant but trading conditions continued to worsen.

The ENO is still without a director following the departure of Nicholas Payne last year.

Mr Smith said around 60 candidates had applied for the position and an appointment would be made in the next few months.