The theatre only recently reopened after a �2.1m revamp

The council is considering stopping the Northcott's �547,000 grant, about a third of its income, from April 2009.

Audiences and performers have started a petition for the grant to be kept.

The Arts Council said the cuts, if they went ahead, would not take effect for another year, allowing the theatre to find other funding sources.

The Northcott had only reopened in December after an 11-month, �2.1m revamp when it was told the grant was being stopped.

The works included essential works to comply with health and safety laws and the Disability Discrimination Act.

Theatre bosses said there was a real possibility that the theatre could be forced to close with the loss of 58 jobs because it could not afford to stay open without the grant.

Audiences are petitioning the Arts Council to keep the grant

They added that because it had had consistently good audience figures, its closure would affect the region's arts, not just the city's.

Theatre artistic director Ben Crocker said: "A theatre such as the Northcott is phenomenally valuable for the region.

"If you don't have that hub for artistic activity, the region will be a great deal poorer as a result."

The theatre is currently hosting its pantomime, Cinderella.

After performances, audiences and performers have been signing a petition to try and keep the funding.

Nick Capaldi, the executive director for the Arts Council in the South West, said he "hoped hope ways can be found of sustaining what is obviously a popular theatre".

He said: "We're not convinced that the Northcott will necessarily close as a result of the proposals we're putting forward. We do believe it can find viable way forward in the future."