Two's company, three's a crowd - unless you're talking dance company, in which case two is so few as to be well nigh unworkable. But that is precisely the number of members - front and back-stage - now fielded by The Kosh, a contemporary outfit that only two years ago was riding high: seven dancers, 90 performances a year playing to 80 per cent houses, and a startling record for bringing in a young audience that wouldn't be seen rigid at anything less-than-cool. In business terms, the company's market share was healthy. In artistic terms, its record for accessibility and audacity was unchallenged. In short, The Kosh (even the name's a knockout) appeared to have hit the spot.

So why, after 12 years' support, did the Arts Council suddenly pull out every penny of the company's pounds 200,000-a-year funding? The Kosh - kiboshed - demanded to know. Nearly 5,000 fans demanded to know. But answer came there none (at least, none that made sense). Now the Parliamentary Ombudsman has been called in, in an unprecedented investigation of the Arts Council, to examine accusations of maladministration, making false statements and contravening its own code of practice. It's strong stuff. And after an enquiry lasting 18 months, the Ombudsman's report is imminent.

In the meantime the company has refused to lie down and die. Whittled to its founding duo - director Michael Merwitzer (who drives the van) and performer Sian Williams (spotted after Tuesday's performance sweeping the stage) - it defiantly continues to tour, with a double bill that ingeniously incorporates so many of the eclectic elements of its old shows, including acrobatics and story-telling, that you'd scarcely guess the ground had shifted but for the fact that Williams goes it alone.

This woman can do the work of 20. She dances, she sings, she flips on a trapeze as if she was born on one; and all the while (yes, even while hanging like a bat) she narrates challenging, blank-verse narrative with the crisp-vowelled command of an actress whose name you'd expect to see in lights at the South Bank rather than a converted bus-factory behind King's Cross. Circuit Breaker, inspired by the poetry of Judith Wilkinson, is the story of a love affair told through the imagery of circus. Cue Williams as daydreaming typist, high-wire queen, prancing pony, strongman. Upstart, the following piece, is a fantastic take on Spanish farruca (normally a man's domain) to a pounding beat, with the dancer spraying sweat in a purple rubber mini-dress. Sian Williams is a stunner. If the pending decision falls in The Kosh's favour, their action will have struck an important blow for the responsible use of public money for the arts.

The Kosh: Pleasance, N7 (0171 609 1800), to Sat.