The eisteddfod has debts of �300,000

Culture Minister Alun Pugh said on Friday cash would be made available by the Welsh Assembly Government and the Welsh Language Board.

He also announced details of a three-year "stabilisation" programme for the event - Europe's biggest cultural festival.

He said the money would "be linked to modernisation and promotion".

We have to be optimistic Eisteddfod director Elfed Roberts

And he said "external expertise" would also be brought in to help the eisteddfod to maximise its potential.

"I am not interested in a short-term fix," Mr Pugh said.

"We all share the aim of a bilingual Wales, and I have made it clear that the extra funding comes with a duty to broaden the appeal of the eisteddfod to a wider audience in Wales and beyond.

"This is not just about the commercial need to increase income from visitors; it is also about promoting Welsh to those people who have not had the opportunity to learn the language."

In September an emergency meeting of the festival's organisers heard it needed to save �200,000 a year.

Mr Pugh has said he wants the event to have a broader appeal, and eisteddfod organisers have been working to modernise it and make it more attractive to those who do not speak Welsh

Newport in south east Wales hosted the 2004 event, which proved a great success with visitors who did not speak Welsh, as well as regular eisteddfod-goers.

An appeal was launched to raise funds, ahead of next year's event at Faenol near Bangor.

Earlier this year, Welsh Language Board agreed to help ease the eisteddfod's financial problems by handing over �40,000, and there are hopes of additional funding, too.

Festival director Elfed Roberts has already expressed hopes the assembly government might agree to a one-off grant of �300,000.

Speaking on BBC Radio Wales, Mr Roberts said he was optimistic that the help would be given.

"I don't think it will save us from the present financial crisis, but it will certainly help," he told Good Morning Wales.

"We have had very constructive meetings with Mr Pugh, and also with the chairman and chief executive of the Welsh Language Board.

"The minister has stated that he would like to see the eisteddfod not only surviving this present financial crisis, but also flourishing in the future, so we have to be optimistic."

Dr Alun Evans, president of the National Eisteddfod Court - the festival's governing body - said the public had been generous in donating funds, but there was a need to build up reserves for the future.

The eisteddfod wanted to broaden its appeal to people in Wales who did not speak Welsh, but increasing the activities on offer on the eisteddfod maes meant spending more.