Clwyd Theatr Cymru is urged to hold seasons in south Wales

In a meeting on Friday the council discussed the report, compiled by a leading arts consultant.

It sets out a number strategies to win back audiences and support writers and theatre companies.

It also claims English language theatre in Wales has been "under-resourced, under-valued and under-developed."

English language theatre in Wales has suffered from "a lack of consistent policy and investment," according to the report.

According to Michael Bogdanov, the artistic director of the Wales Theatre Company, theatre is the "heartbeat" of a nation.

"It is vital to strengthen the existing infrastructure theatre can be an instrument of social change and at its best it can change perceptions about the way we live," said Mr Bogdanov.

Report recommendations Clwyd Theatr Cymru to hold seasons in Cardiff and Swansea Develop a new vision for Sherman Theatre, Cardiff Redevelop Torch Theatre, Milford Haven Maximise production capacity of smaller companies Establish new building-based company in south Wales

"Over the past 20 years there has been a gradual erosion in productions of English language theatre and it's almost disappeared in many areas," he said.

He cited "lack of investment" as one of the main reasons which affects artistic vision.

"With the lack of resources the imagination is hindered - especially if you've got stages the size of postage stamps.

"It would be beneficial if the Sherman Theatre was redeveloped, but actors need large stage spaces to develop their craft and we need a theatre which can sit around 850 people."

Mr Bogdanov said a commitment of �3m - �5m annually would make a significant difference.

The report, compiled by Peter Boyden, said there was no large-scale producing theatre for adults in the south Wales urban belt that encompasses two-thirds of the Welsh population.

It also said the range and volume of English language production in Wales had been dropping, with the result that audiences were declining and much theatre talent was forced to work outside Wales.

Sharon Morgan, a Cardiff-based actor who has worked in theatre and TV for 35 years, welcomed any recommendations which allowed the people to enjoy theatre.

However she believed the way forward was to create a federal theatre with centres in Cardiff, Clwyd, Bangor and Carmarthen.

"I think we should wipe the board clean and create a national theatre with bases across the country with people feeding into it in both languages," said Ms Morgan, who starred in the classic '70s rugby drama Grand Slam and the Magnificent Evans with Ronnie Barker.

"When actors leave Wales, this doesn't move us forward, this doesn't create continuity."

Actor Sharon Morgan wants to see a federal theatre in Wales

"We need to be more confident and the bottom line: we need more funding," said the actor, who took her show One Woman One Voice to the US for St David's Day.

Geraint Talfan Davies, chairman of the Welsh Arts Council, said: "With the support of the assembly government we have already established a national theatre in the Welsh language, and put theatre for young people on a firm foundation."

"We now need to put English language theatre on its feet.

"I was delighted that we had the support of the Minister of Culture Alun Pugh in undertaking this work.

"No nation with our own talent resources should be content to see those resources drift elsewhere or simply atrophy for lack of opportunity," he added.