The company was founded more than 30 years ago

General manager Ruth Ogston voiced shock and anger at the decision and said there were plans to appeal.

The Glasgow-based company has been told its core funding will end in August.

From then it will have to apply for cash for individual projects - although this "flexible" funding will not be available until March next year.

Ms Ogston said there were no guarantees that 7:84 would receive any future funding, adding that no cash had been made available to wind up the company.

We will be appealing this decision but fear that the company... will not be respected enough for a decision to be revoked Ruth Ogston General manager of 7:84

She said the arts council had a new priority of supporting the artist and believed 7:84 was too "audience-focused".

Ms Ogston said it was thought that other similar companies face closure in March next year.

But she said 7:84 was in a "unique position" as the other bodies funded by the arts council would be guaranteed their cash until then, while the Glasgow company loses its support this August.

She said it looked like 7:84's current play, Free-Fall, would be its last touring production.

"We are in shock and so deeply sad and angry that the company's work over 33 years has been wiped out under new criteria that ignores audiences," added Ms Ogston.

Holyrood motions

"We will be appealing this decision but fear that the company - and the Scottish tourist circuit and vast audiences - will not be respected enough for a decision to be revoked."

The Scottish Arts Council, which gave more than �230,000 to 7:84 this year, refused to comment in advance of an announcement on Thursday about changes in the way it funds the arts.

Last month more than 20 MSPs supported two Holyrood motions backing the company, which was founded by playwright John McGrath on socialist principles.