Emma Griffiths BBC News Online, London

Belts are tightening at two theatres in south-west London which are under threat of closure.

The Secombe and the Charles Cryer in the London Borough of Sutton will be brought back under council control this month.

Audience numbers for the 400-seat Secombe Theatre's shows dropped by as much as 50% for some shows.

We reached a point where we thought we wouldn't survive unless we closed and concentrated on fundraising Nick Murza, Little Angel theatre manager

Even so-called sure-fire hits like the Chas and Dave shows are no longer pulling in the crowds.

Both were run by the Sutton Performing Arts Network (Span) which planned to close the Secombe at the end of January because of a large hole in its budget.

The council has since stepped in with a short-term rescue plan following a public campaign to save it.

But to remain solvent, in-house production will be cut and the theatres will be hire-only venues to "create a period of financial and managerial stability".

They will also be hired to host conferences and prize-giving ceremonies.

A feasibility study is being carried out to determine whether the theatres will remain open.

But Span's artistic director Keith Lancing said: "The budgetary position hasn't really changed a great deal, given the amount spent on the venues has reduced by �200,000 over two years.

"It is unlikely the local authority will be in a position to operate the two theatres with the same kind of programme and level of service as has been the case up to now."

He said Sutton, a relatively affluent outer London borough, had difficulty attracting funding and the theatre was competing for audiences against increased home entertainment.

The Little Angel had to close for six months

Span is not alone. In Islington, north London, the 100-seat Little Angel puppet theatre was forced to close for six months in 2002 for the first time in its 40-year history.

Council funding dried up two years ago and a benefactor's death led to its temporary closure in April.

General manager Nick Murza said: "We reached a point where we thought we wouldn't survive unless we closed and concentrated on fundraising."

'Not popular'

"There are so many arts organisations that, although London gets a large share of the cake, it is not enough to cope with the amount of people looking for money."

It re-opened in October after six months of campaigning, but remains in a precarious position.

Peter Heppell, a consultant editor of The Stage, said outer London theatres suffer from their proximity to the West End.

He added regional theatres are often not big or rich enough to attract big-name performers and can end up relying on tribute shows.

"A lot of them are now looking over their shoulders," he added.