The Arts Council withdrew all its financial assistance to the Citadel - the Water Street theatre which helped launch the career of comedian Johnny Vegas.

That represents almost third of its outside funding - around £80,000 annually - and will take affect from April.

Around 400 arts organisations from across the country have also seen their Arts Council funding cut.

However, Citadel chairman Nick Taylor has insisted they have plans in place to cope with the loss of revenue.

He said: "The decision of the Arts Council to withdraw all funding from the Citadel is unjustified and is a bitter blow to the arts in general. We have a tough but hectic year ahead of us and we will continue to bring the arts to St Helens.

"Fortunately, unlike many other organisations across the country we have known about this for some time and we have been working hard behind the scenes to ensure that we can keep on running.

"As far as we are concerned we are not going to let this move by the Arts Council - a very difficult organisation to work with - to have any impact on our work within St Helens."

Talks are underway between bosses at the theatre and St Helens Council and their neighbours St Helens College, who recently won funding for a massive refurbishment.

Mr Taylor added: "I feel very sorry for other arts organisations around England that have been left high and dry by these cuts. The Arts Council allocations system is extremely unfair.

"Their decisions are extremely subjective and do not reflect the importance of our role within the arts community."

In 2000 the Citadel was awarded £707,000 to revamp the building. Thatto Heath's finest Johnny Vegas honed his substantial comedy talent at the theatre and is now a patron.

Artists such as the Stone Roses, The Verve, the Happy Monday and Candi Staton also performed there during their early years. It is also one of the best known venues on the British blues circuit.

Michael Eakin, regional executive director for the Arts Council England North West, said: "The decision not to renew an organisation's funding is a very difficult decision and one that we do not take lightly.

"The decision to disinvest was not part of the present investment strategy and was taken by our Regional Council and communicated to the organisation in April 2007."

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