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If it's Christmas, it must be The Nutcracker: Clara and her wooden soldier doll are our constant companions during a season otherwise observed in ever different ways. At English National Ballet, which has danced the work every December for the past 59 years, the latest version of the Hoffmann classic opens on Friday for 32 performances at the Coliseum in London, the company's Christmas home.

There is much riding on the production, choreographed by Wayne Eagling, ENB's artistic director, and, many believe, saviour. Taking the creative helm five years ago when the ENB was financially on its knees, he has already worked wonders, breathing new life into an old repertoire and taking audiences to record levels. Nearly 90,000 bought tickets for its Christmas season last year.

But last week's chill wind is blowing inside the company, too. The ENB will have £500,000 less to spend next year, its budget down by 10 per cent, so there is added impetus behind the new work. This may explain the elevation of the Nutcracker's numerous eye-catching jetés, although the skill of 20-year-old Russian Vadim Muntagirov, ENB's brightest male star, will also help.

Happily, the Fates are on hand. Dance has never been more popular in Britain; audiences are up everywhere. Matthew Bourne, the choreographer who has brought new audiences to dance by reinterpreting old favourites such as Swan Lake and his current revival of Cinderella, regularly sells out at Sadler's Wells. High-profile shows such as the Strictly Come Dancing, which pulls more than 11 million viewers an episode, plus new shows including Sky's Got to Dance, which starts a second series in January, are driving demand. Dance work-outs and the new, Latin-based Zumba have now joined gym staples such as Bodypump, some five million Brits of all ages shaking their booties each week in the name of fitness and fun. And classical ballet troupes have become regulars at music festivals from Bestival to Latitude.

The elite Royal Ballet takes to the mass market stage of London's O2 next June, in pursuit of a different crowd. A vast production of Romeo and Juliet will attract audiences of up to 10,000 a performance, partly by slashing the Covent Garden price of entry. ENB did something similar this summer, dancing its ever popular Swan Lake in the round at the Albert Hall.

Although ENB's prospects are good – 47,000 tickets have already been sold for The Nutcracker – new shows don't come cheap. It will take three years to recoup the ballet's £600,000 budget. But the sky's the limit if Eagling's Edwardian-staged version, the 10th that ENB will have danced since its creation 60 years ago, is a hit. George Balanchine's 1954 Nutcracker is danced to this day in New York.

ENB's phoenix-like revival shows that, with the right leadership, even arts companies can survive big budget squeezes. But it needs audiences to stay loyal, and to be spared from further cuts. The Nutcracker must perform its own Christmas miracle.

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