The theatre attracts about 180,000 people a year

Managers of the theatre in Truro said it was unclear whether the current grants would continue if the council was successful.

The Hall for Cornwall made a loss of about �100,000 last year and two posts and some workshops have been cut.

The venue attracts about 180,000 theatre and concert-goers a year.

It is used for a wide variety of shows, from opera to rock concerts and pantomime to amateur dramatic performances.

Positive outcome

In 2000, a rescue package saved it from closure, and in 2005 it introduced a 50p levy on all ticket sales to raise money.

The theatre currently receives separate grants of �60,000 from Carrick District Council and �100,000 from Cornwall County Council.

But director Tim Brinkman said if the county and district authorities merged, this may not continue.

"The fact there are discussions about the possibility of a new authority for Cornwall will have implications for the Hall for Cornwall," he said.

"What I hope and trust is that our politicians and the officers working on it will do the sensible thing and they'll deliver any change that comes about in a way that's positive and supportive for the Hall."

Arts Council review

The theatre is hopeful one of its funders could increase its contributions.

Paul Goddard from the Arts Council South West said it was currently reviewing funding levels, but could make no promises until its new budget was approved later in the year.

He told BBC News: "For most of the organisations we fund, we'd want to look at a 2.7% increase year on year on the currently level of funding."

County councillor Eric Brook said the same level of grants had been allocated in its bid for unitary status, although it would be up to the new council to decide how the grants were spent.