Opera: Extravagance is opera's lifeblood. Our top companies are being squeezed - so how do other countries cope?

Chorus of accountants calls the tune as state largesse is slashed

There was never a show quite like it. Aida might demand elephants and Berlioz's Les Troyens a cast of thousands, but Gian Paolo Cresci - notorious general manager of the Rome Opera in the venal early 1990s - knew how to make a spectacle of himself in a way that the great operatic composers of the 19th century could only hint at.

Mr Cresci hired staff by the hundred and dressed them all in livery coats, threw champagne parties whenever the spirit moved him and ordered priceless Persian carpets for his foyer. To keep the morale of his fire prevention staff high, he gave them all free English lessons. Never was so much effort thrown behind so little - a mere dribble of indifferent performances each year - but Mr Cresci did not seem to mind.

As one of his highly placed political mentors once commented, he was an opera all by himself. Naturally, this state of affairs could not last, and when Italy's magistrates launched their anti-corruption drive in 1992, Mr Cresci and his system of management was ditched just in time to keep the bailiffs away. And Rome was not the only problem facing Italy's new generation of political leaders.

For decades, the country's 13 opera houses - all funded exclusively by the state - had developed varying degrees of wanton extravagance. Each had hundreds of largely useless full-time employees on its books (all of them members of powerful and highly fractious unions), spent far too much money on sets and costumes, never stooped to revive productions, even successful ones, and managed no more than a few dozen performances a year.

The state pumped in more than 400bn lire each year (pounds 150m), and saw a return of barely 10 per cent on its investment. The Italian opera world has undergone a painful coming of age in the intervening years. Since last summer the 13 houses have ceased to be enti, or state-run enterprises, and are now managed as self-financing foundations. They are still eligible for state funding, but with a ceiling of 40 per cent of their overall budget. Not only do they have to find private sponsors for the first time in their existence, but they also have to find a way to break even.

The results have been rather mixed. Perhaps predictably, La Scala in Milan has had little difficulty attracting private sponsors, including banks, energy companies and the tyre manufacturer Pirelli. The Rome Opera, under its energetic new manager, Sergio Escobar, has cut its costs by about 30 per cent, dramatically increased the number of performances and brought in as much as 30 per cent extra at the box-office.

The turnaround has not been rapid enough, however, to balance the books, and the state has offered "compensation" money for the cuts that have been inflicted. The unions, predictably, are forecasting the end of the world as they know it, but there seems to be genuine concern about the viability of the new regime, particularly for the smaller, less well-known houses.

The reforms have also left a question- mark over La Fenice, the Venice opera house, which burnt down nearly two years ago. With all this cutting going on, rebuilding funds have been thin on the ground and it could take years before the new house gets back on its feet.