Culture Minister Jenny Randerson welcomed the announcement

The fillip comes a month after final approval was given for the �100m Wales Millennium Centre - the WNO's new home in Cardiff Bay.

It also follows a period of financial uncertainty for the opera house, which is playing a key role in Cardiff's bid for European City of Culture in 2008.

Achieved through a "stabilisation process," the money marks an end to a difficult financial period for the company.

The WNO gets 60% of its annual funding from the English arts council and that element will increase by 9% in the current financial year to �5.3m

The Arts Council of Wales will increase its funding by 15% to nearly �3.5m

The extra cash will allow the WNO to restore its financial health and take the opera to people living outside the main urban centres.

Wales Millennium Centre is to be the WNO's home

It will also allow the company to double the size of its popular provincial tours in Wales and restore its touring presence in England.

The company will also be able to increase its presence in Swansea and Llandudno and boost its spending on education and community work.

It will stage four new productions and five revivals a year and will also bring in a young artists' training programme to develop new talent.

WNO General Director Anthony Freud said funding pressures has mean that the company's ability to develop a medium and long-term strategy had been severely hampered in recent years.

"Welsh National Opera is passionate about maintaining and enhancing artistic excellence and it is this commitment which has been our driving force throughout the stabilisation process," said Mr Freud.

Welsh Culture Minister Jenny Randerson, who last week announced a ten-year strategy for the arts in Wales, said she was delighted by the news of the WNO funding package.

"WNO is renowned for its artistic excellence and is a wonderful example of an organisation that helps put Wales on the world map," Ms Randerson said.