As reported last week, Virginia Bottomley, the Secretary of State for National Heritage, is keen that lottery money should be used to help fund dance and drama students.
However, the Arts Council, which distributes lottery awards, is adamantly opposed to this, claiming that dance and drama students should receive mandatory awards, as do music and art students.
The new Arts Council inquiry will be carried out by Clive Priestley, chairman of the London arts board. He will look into why the number of discretionary awards has dropped by 44 per cent since 1987.
Many local authorities now give no grants at all for drama and dance, and others are not accepting applications for 1996-97.
Last week Rada received a pounds 22m lottery award. But many of its would-be students are unable to take up their places, because of local-authority cuts to discretionary grants.
Rupert Rhymes, the chief executive of the Society of London Theatre, commented: "As far as our members go, we are dismayed at the news that there is to be yet another delay before anything is done. A year ago we were told that the situation was desperate but still nothing has happened."Reuse content