A YORK youth theatre may be forced to close if it loses crucial council funding.

The Stagecoach Youth Theatre is set to lose its £9,500 annual grant as the City of York Council tries to make savings in next year's budget.

Now the theatre's founder and director John Cooper has said Stagecoach will shut if councillors press ahead with the cuts.

He said: "We will no longer exist in three years time.

"Where else are we going to get revenue funding? That is a fact and I cannot continue trying to run a company on air. Everything that we have built up, that the young people have worked for over a period of 16 years, will be completely redundant due to the council's decision. We will have to go into liquidation as a limited company. I cannot see any other way".

The plan to reduce the grant by £2,000 a year until 2009, when it will be cut entirely, will be put to councillors on January 16 as part of the annual budget-setting process.

Youngsters from the Monkgate-based group, which has 140 members and puts on seven major productions a year, have launched a campaign to halt the cuts. They protested in the city centre on Saturday, and they hope to hand a petition to the council leader, Coun Steve Galloway, on the eve of the vital budget vote.

Mr Cooper said: "We know that there is a flood of support out there and it needs to be expressed so that the council is aware of that. We need them to understand the degree of support we have got. I am very pleased with the backing that we have got from the public and our audiences but obviously we need to get as many signatures on the petition as possible."

The council's leisure and heritage chiefs have been told to find savings of £300,000 in the 2006/07 budget. Coun Keith Orrell, executive member for leisure and heritage, said: "The cuts which must be made in order to deliver a balanced budget within our poor grant settlement are very difficult and disappointing.

He said: "Having seen the work that Stagecoach does the quality of this work is not in question, but so do many other theatre groups that currently receive no funding from the council.

"The Liberal Democrats will be continuing to urge the Government to provide proper funding for the city, but until that happens we have no choice but to reduce our commitments".

Updated: 10:05 Monday, January 09, 2006