Sadler's Wells closure threat

John McKie on the crisis facing two of Britain's leading music institutions

The Sadler's Wells Theatre faces possible closure because it is unable to use its pounds 30m rebuilding grant from the National Lottery, its chief executive said yesterday.

The historic dance venue in Islington, north London, the capital's oldest theatre site, still needs to raise pounds 7.5m before it can use any of its pounds 30m grant. The lottery money was awarded on the basis that Sadler's Wells would raise pounds 9.5m of the rebuilding costs but the theatre has so far only raised pounds 2m. Its chief executive, Ian Albery, has warned it could take five years.

He said yesterday: "We do not know if we're going to be allowed to rebuild the theatre and we don't know if we should continue the artistic programme for a theatre which may not be here.

"It's a very real possibility we might have to close."

The rebuilding of Sadler's Wells had been planned for June. However, but the directors of the company - which became the first to win all three dance categories at Sunday night's Olivier awards - were unable to persuade the Arts Council and the Department of National Heritage to hand some of the pounds 30m over while attempts were made to raise the remaining pounds 9.5m.

A summer closure is now a strong possibility, although the theatre hopes to move temporarily to the Royalty Theatre in Kingsway, central London.

An Arts Council spokeswoman ruled out an advance on the pounds 30m grant, but said that it could be kept for the theatre.

She added: "There isn't a fixed deadline and everything is open to negotiation. Each application is different."

The theatre's predicament has again thrown up the debate about large building grants for arts organisations which are then unable to raise extra funding from sponsorship to initiate rebuilding. Ian Albery said that other bodies in similar difficulties were the Royal Court Theatre, the Royal Opera House and the Tate Gallery.

The Arts Council's spokeswoman denied this, saying: "This venue is the only one of any significance to have problems of this kind."