A number of venues could be used for productions

It wants a company created which would tour existing theatres across Wales.

It says the annual cost would be about �2m, including �0.5m already committed to English-language theatre in May.

Culture Minister Alun Pugh said money had been set aside but warned the rejection of his government's draft budget may threaten the plans.

A Welsh-language national theatre already exists, but the arts council wants a touring English-language company to be created.

The non-building based model has already been tried out in Scotland, which launched its own national theatre this year with the financial support of the Scottish Executive.

It has suggested the new company could have a base in the south Wales valleys and would commission work from the existing theatre infrastructure to appear under the National Theatre of Wales banner at venues in Wales and overseas.

Director Michael Bogdanov is backing the idea

The assembly's culture committee discussed the proposals on Thursday.

Culture Minister Mr Pugh said there was nothing to stop a national English-language theatre for Wales going ahead, adding that a �750,000 had been set aside in the assembly government's spending plans which would enable work to start on setting it up.

But Mr Pugh said the rejection this week of the assembly government's draft budget by opposition parties could threaten the project.

He said last year's budget discussions finished with less money for the culture budget adding that in the coming financial year "we must avoid at all costs a situation that culture takes a hit".

'Showcase work'

The plans have been welcomed by Neath-born director Michael Bogdanov, who is working with the Wales Theatre Company.

He told BBC Wales: "There have been successive attempts over the last century to get an English-language national Theatre off the ground and each one has bitten the dust.

"I'm delighted that the idea has been resurrected and this one stands a chance of succeeding.

"What's needed is to draw together all the strands of English language theatre. We have fabulous practitioners but a lot of them work abroad.

"They work in Hollywood, or London and the West End, particularly the actors. I think it's time we brought all of them together so we could showcase our best work, not only in Wales but in the rest of the world."